- Cash offer of $9.50 per share
- All equity transaction supported by
well-capitalized consortium
- Will continue to invest in strategic
transformation, enhancing student outcomes and career relevant
education for working adults
Apollo Education Group, Inc. (NASDAQ: APOL) today announced
it has entered into a definitive agreement to be acquired by a
consortium of investors including The Vistria Group, LLC, funds
affiliated with Apollo Global Management, LLC (NYSE: APO), and
Najafi Companies for $9.50 per share in cash for both Class A and B
shares. The purchase price represents a premium of 30 percent over
Apollo Education Group’s 30-day volume weighted average stock price
for the period ended Feb. 5, 2016, and a 44 percent premium over
the closing price on Jan. 8, 2016, immediately prior to the
announcement that the Board of Directors was pursuing strategic
alternatives. Tony Miller, Chief Operating Officer and Partner of
The Vistria Group and former Deputy Secretary of the U.S.
Department of Education, will become Chairman of the Apollo
Education Group Board upon transaction close.
“The Apollo Education Group Board of Directors reviewed
strategic alternatives and believes this transaction is in the best
interest of all shareholders and strongly supports our
transformation efforts,” said Greg Cappelli, Chief Executive
Officer of Apollo Education Group. “This new structure will allow
Apollo Education Group the flexibility and runway it needs to
complete the transformational plan at University of Phoenix, which
will enable us to serve our students more effectively during a
period of unprecedented volatility within our industry. We will
also continue to expand our international operations and remain
committed to driving principles of operating excellence.”
“We are excited by the opportunity to build on the
transformational work being done by the company,” said Miller. “For
too long and too often, the private education industry has been
characterized by inadequate student outcomes, overly aggressive
marketing practices, and poor compliance. This doesn’t need to be
the case. We are committed to accelerating and enhancing efforts to
establish University of Phoenix as the leading provider of quality
higher education for working adults and to continue supporting the
organization’s commitment to operating in a manner consistent with
the highest ethical standards.”
Miller was the Deputy Secretary and Chief Operating Officer at
the U.S. Department of Education from 2009 to 2013. Miller oversaw
day-to-day operations for a broad range of management, policy and
program functions, spanning early childhood through post-secondary
education. In addition to his operational responsibilities, Miller
represented the U.S. Government at education and workforce
development international forums and led the Department’s missions
to China, Korea, Japan, Singapore, Indonesia, Australia, New
Zealand, Ecuador, Brazil and Russia.
Upon completion of the transaction, Apollo Education Group will
be privately held and its affiliated institutions will remain
subject to the same U.S. and international regulations and
accreditation standards.
The agreement was approved by Apollo Education Group’s Board of
Directors. The transaction is subject to financial, operational and
customary closing conditions. It is also subject to regulatory
conditions, including the expiration or termination of the
applicable waiting period under the Hart‐Scott‐Rodino Antitrust
Improvements Act, and approvals, including by the U.S. Department
of Education, the Higher Learning Commission and state regulatory
and programmatic accreditation bodies. In addition, it is subject
to approval by a majority of Apollo Education Group Class A and B
stockholders, voting as separate classes. Each of Apollo Education
Group’s Class B stockholders has entered into an agreement to vote
in favor of the transaction. The acquisition is expected to be
completed by Apollo Education Group’s fiscal year-end, in August
2016. Apollo Education Group and Apollo Global Management are
unaffiliated entities.
Barclays, Credit Suisse and Evercore are acting as financial
advisors, and Sullivan & Cromwell LLP as legal advisor to
Apollo Education Group. Paul, Weiss, Rifkind, Wharton &
Garrison LLP is acting as legal advisor to the consortium of
investors.
About Apollo Education Group, Inc.
Apollo Education Group, Inc. is one of the world’s largest
private education providers, serving students since 1973. Through
its subsidiaries, Apollo Education Group offers
undergraduate, graduate, professional development and other
non-degree educational programs and services, online and on-campus
principally to working learners. Its educational programs and
services are offered throughout the United States and
in Europe, Australia, Latin
America, Africa and Asia, as well as online
throughout the world. For more information about Apollo
Education Group, Inc. and its subsidiaries, call (800)
990-APOL or visit the Company’s website
at www.apollo.edu.
About The Vistria Group
The Vistria Group is a Chicago, IL based private investment firm
focused on investing in middle market companies in the healthcare,
education, and financial services sectors. Vistria’s team is
comprised of highly experienced operating partners and private
equity executives with proven track records of working with
management teams in building innovative market leading
companies.
About Apollo Global Management
Apollo Global Management is a leading global alternative
investment manager with offices in New York, Los Angeles, Houston,
Chicago, Bethesda, Toronto, London, Frankfurt, Madrid, Luxembourg,
Mumbai, Delhi, Singapore, Hong Kong and Shanghai. Apollo Global
Management had assets under management of approximately $170
billion as of December 31, 2015 in private equity, credit and real
estate funds invested across a core group of nine industries where
Apollo Global Management has considerable knowledge and resources.
Apollo Global Management has significant experience investing in
the education sector with current and former private equity fund
investments in leading companies including McGraw Hill Education,
Connections Academy and Sylvan Learning Centers. The portfolio
companies owned by funds managed by affiliates of Apollo Global
Management are managed and operate independently from one another.
For more information about Apollo, please visit www.agm.com.
About Najafi Companies
Najafi Companies is an international private investment firm
based in Phoenix, Arizona, targeting education, media, consumer
products, internet services, and direct marketing sectors. The firm
makes highly selective investments in companies with strong
management teams across a variety of industries, often in areas
undergoing rapid transformation. Najafi Companies funds its
investments with internally generated capital, not through a fund.
The firm is able to move quickly and decisively when investing and
make investments that create maximum value for the long term.
Forward-Looking Statements Safe Harbor
Statements about Apollo Education Group and its business in this
release which are not statements of historical fact, including
statements regarding Apollo Education Group’s future strategy and
plans and commentary regarding future results of operations and
prospects, are forward-looking statements and are subject to the
Safe Harbor provisions created by the Private Securities Litigation
Reform Act of 1995. These forward-looking statements are based on
current information and expectations and involve a number of risks
and uncertainties. Actual plans implemented and actual results
achieved may differ materially from those set forth in or implied
by such statements due to various factors, including without
limitation: (i) the impact of increased competition from
traditional public universities and proprietary educational
institutions; (ii) the impact of the initiatives to transform
University of Phoenix into a more focused, higher retaining and
less complex institution, including the near-term impact on
enrollment; (iii) the impact of Apollo Education Group’s ongoing
restructuring and cost-reduction initiatives; (iv) impacts from
actions taken by our regulators that could affect University of
Phoenix’s eligibility to participate in or the manner in which it
participates in U.S. federal and state student financial aid
programs; (v) further delay in the University’s pending
recertification by the U.S. Department of Education for
participation in Title IV student financial aid programs, or any
limitations or qualifications imposed in connection with any
recertification; (vi) the impact of the U.S. Department of Defense
(“DoD”) action to place University of Phoenix on probation in
relation to participation in the DoD’s Tuition Assistance Program
for active duty military students; (vii) the impact of any
reduction in financial aid available to students, including active
and retired military personnel, due to the U.S. government deficit
reduction proposals, debt ceiling limitations, budget sequestration
or otherwise; (viii) changes in regulation of the U.S. education
industry and eligibility of proprietary schools to participate in
U.S. federal student financial aid programs; (ix) changes in
University of Phoenix enrollment or student mix; (x) the impact on
student enrollments of the announcement of the merger and general
economic conditions; (xi) third parties may claim that Apollo
Education Group’s products and services infringe their intellectual
property rights; (xii) fluctuations in non-U.S. currencies that
could impact reported operating results of foreign subsidiaries;
(xiii) uncertainties associated with the proposed sale of Apollo
Education Group, the expected timing of completion of the proposed
merger, the satisfaction of the conditions to the consummation of
the proposed merger, the receipt of the regulatory approvals
required for the merger on the terms expected or on the anticipated
schedule, the ability to complete the proposed merger and the
impact of such proposed merger on Apollo Education Group’s
businesses, employees, students and suppliers; and (xiv) unexpected
expenses or other challenges in integrating acquired businesses,
consumer or regulatory impact arising from consummation of such
acquisitions, and unexpected changes or developments in the
acquired businesses. For a discussion of the various factors that
may cause actual plans implemented and actual results achieved to
differ materially from those set forth in the forward-looking
statements, please refer to the risk factors and other disclosures
contained in Apollo Education Group’s Form 10-K for fiscal year
2015, filed with the Securities and Exchange Commission (the “SEC”)
on October 22, 2015, Form 10-Q for the quarterly period ended
November 30, 2015, filed with the SEC on January 11, 2016, and
other filings with the SEC which are available at www.apollo.edu.
The cautionary statements referred to above also should be
considered in connection with any subsequent written or oral
forward-looking statements that may be issued by Apollo Education
Group or persons acting on Apollo Education Group’s behalf. Apollo
Education Group undertakes no obligation to publicly update or
revise any forward-looking statements for any facts, events, or
circumstances after the date hereof that may bear upon
forward-looking statements. Furthermore, Apollo Education Group
cannot guarantee future results, events, levels of activity,
performance, or achievements.
Additional Information
This communication may be deemed to be solicitation material in
respect of the proposed sale of Apollo Education Group. In
connection with the proposed transaction, Apollo Education Group
intends to file relevant materials with the SEC, including a
preliminary proxy statement on Schedule 14A. When completed, a
definitive proxy statement and a form of proxy will be mailed to
the shareholders of Apollo Education Group. Apollo Education
Group’s shareholders are encouraged to read the proxy statement
regarding the proposed merger and any other relevant documents
filed with the SEC when they become available as they will contain
important information about the proposed merger. Apollo Education
Group’s shareholders will be able to obtain, without charge, a copy
of the proxy statement (when available) and other relevant
documents filed with the SEC from the SEC’s website, www.sec.gov
and Apollo Education Group’s website, www.apollo.edu.
Participants in Solicitation
Apollo Education Group and its directors and officers may be
deemed to be participants in the solicitation of proxies from
Apollo Education Group’s shareholders with respect to the proposed
merger. Information about Apollo Education Group’s directors and
executive officers and their ownership of Apollo Education Group’s
common stock is set forth in the definitive information statement
for Apollo Education Group’s 2015 Annual Meetings of Class A and
Class B Shareholders, which was filed with the SEC on December 23,
2015. Shareholders may obtain additional information regarding the
interests of Apollo Education Group and its directors and executive
officers in the proposed merger, which may be different than those
of Apollo Education Group’s shareholders generally, by reading the
proxy statement and other relevant documents regarding the proposed
merger, when filed with the SEC.
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version on businesswire.com: http://www.businesswire.com/news/home/20160208005571/en/
For Apollo Education Group, Inc.:InvestorsApollo
Education Group, Inc.Beth Coronelli+1 312 660
2059beth.coronelli@apollo.eduorMediaBrunswick GroupTripp
Kyle / Tom Maginnis+1 212 333 3810apollo@brunswickgroup.comorFor
Apollo Global Management:InvestorsApollo Global Management,
LLCGary M. SteinHead of Corporate Communications+1 212 822
0467gstein@apollolp.comorApollo Global Management, LLCNoah
GunnInvestor Relations Manager+1 212 822
0540ngunn@apollolp.comorMediaRubenstein Associates,
Inc.Charles Zehren+1 212 843 8590czehren@rubenstein.comorFor The
Vistria Group:SKDKnickerbockerNell Callahan+1 202 464
6913ncallahan@skdknick.comorFor Najafi Companies:Lavidge
CompanyAnne Robertson+1 480 998 2600
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