Filed by Capella Education Company
Pursuant to Rule 425 under the Securities Act of 1933, as amended
Deemed filed under Rule 14a-12 under the Securities Exchange Act of 1934, as amended
Subject Company: Capella Education Company
Commission File No. 001-33140
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February 1, 2018
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Merger Integration Update: Shareholder Approval
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To the Capella Team:
Back in December, I outlined some of the milestones of the Capella-Strayer merger closing and integration. Im pleased to tell you that we reached a
significant one on January 19.
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Shareholder approval of merger proposal.
On January 19, shareholders of both Capella Education Company and Strayer Education voted resoundingly to approve the proposed merger. The overwhelming
approval signals the confidence shareholders have in the future of Strategic Education, Inc., and is an important step in meeting our goal to close the deal in Q3 of 2018.
Whats next? Integration work continues in earnest.
As I mentioned in my last update, weve established an Integration Management Office to organize and execute the integration. That team is in place and is
beginning integration activities along several work streams. For example, weve created a team to explore how work gets done at both organizations and which technical systems (in IT and elsewhere) are used. We have another team focused on
understanding our two organizations cultures and how to communicate most effectively across both companies. There are work streams underway in other important areas, and well be talking more about them in the coming months.
The
All-Employee
Meeting on Friday, February
23
will be another important way to hear about
the integration. Strayer Education CEO Karl McDonnell, who will be CEO of the combined organization after the closing, will be joining us as we talk more about the merger. Youll be hearing lots more about the meeting in the next couple weeks.
FAQs: Addressing your questions
We continue to
receive great questions from employees. Going forward Ill use these updates to address them as they emerge. Here are some questions weve heard from several employees recently:
Q. Ive heard that Capella is working with an outside firm to consult on the integration. Can you tell me more about that?
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To help ensure a smooth and thorough integration, Capella and Strayer Education have enlisted the consulting firm McKinsey & Company. They have deep expertise supporting corporate mergers and have helped
hundreds of companies through the integration process.
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One of McKinseys initial projects is to gather data, conduct analyses, and make recommendations about the integration and the combined company going forward.
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Its always useful to get an outside perspective on our business, and were eager to see McKinseys recommendations. However, well always use our own best judgmentour knowledge of our
business, our learners, and our employeesin evaluating those recommendations.
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Q. What are the next milestones for
getting the merger approved by accreditors or the government?
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We need to obtain a letter of
pre-approval
from the U.S. Department of Education. Capella and Strayer Education staff are engaged in that process right now.
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The Higher Learning Commission (HLC), Capella Universitys regional accreditor, is expected to discuss the merger at their June 2018 meeting. Were hopeful that the approval itself will follow shortly after
that meeting, allowing the merger closing to go ahead.
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Questions? Let us know.
If you have specific questions about the integration, send them to
MergerQA@share.capella.edu
.Well do our best to address them in a future merger
integration update or reach out to you directly to provide an answer.
As I get more and more into the details of the integration, my confidence about the
future of our combined organization continues to grow. But I know that, along with the excitement, there is uncertainty and ambiguity for many of us. Thats totally normal during a merger process like this, and the best way to navigate through
it is to remain focused on whats right in front of us: our learners and the business operations that support their success.
Thank you for your
continued commitment and professionalism.
Sincerely,
Steve Polacek
Chief Financial Officer
Bcc: *Capella All *Faculty All
Forward Looking
Statements
This communication contains certain forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995
(the
Reform Act
). Such statements may be identified by the use of words such as expect, estimate, assume, believe, anticipate, will, forecast,
outlook, plan, project, or similar words and may include statements with respect to, among other things, the proposed merger of a wholly-owned subsidiary of Strayer with and into Capella, including the expected
timing of completion of the merger; the anticipated benefits of the merger, including estimated synergies; the combined companys plans, objectives and expectations; future financial and operating results; and other statements that are not
historical facts. The statements are based on Strayers and Capellas current expectations and are subject to a number of assumptions, uncertainties and risks. In connection with the safe-harbor provisions of the Reform Act, Strayer and
Capella have identified important factors that could cause Strayers or Capellas actual results to differ materially from those expressed in or implied by such statements. The assumptions, uncertainties and risks include:
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the risk that the merger may not be completed in a timely manner or at all due to the failure to obtain the approval of Strayers or Capellas stockholders or the failure to satisfy other conditions (including
obtaining required regulatory and educational agency approvals) to completion of the merger;
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the occurrence of any event, change or other circumstance that could give rise to the termination of the merger agreement;
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the outcome of any legal proceeding that may be instituted against Strayer, Capella and others following the announcement of the merger;
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the amount of the costs, fees, expenses and charges related to the merger;
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the risk that the benefits of the merger, including expected synergies, may not be fully realized or may take longer to realize than expected;
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the risk that the merger may not advance the combined companys business strategy and growth strategy;
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the risk that the combined company may experience difficulty integrating Strayers and Capellas employees or operations;
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the potential diversion of Strayers and Capellas managements attention resulting from the proposed merger; and
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other risks and uncertainties identified in Strayers and Capellas filings with the Securities and Exchange Commission.
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Actual results may differ materially from those projected in the forward-looking statements. Strayer and Capella undertake no obligation to update or revise forward-looking statements.
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Additional Information and Where to Find It
Investors
and security holders are urged to carefully review and consider each of Strayers and Capellas public filings with the Securities and Exchange Commission (the SEC), including but not limited to their Annual Reports on Form
10-K,
their proxy statements, their Current Reports on Form
8-K
and their Quarterly Reports on Form
10-Q.
The documents filed by
Strayer with the SEC may be obtained free of charge at Strayers website at www.strayereducation.com, in the Investor Relations tab at the top of the page, or at the SECs website at www.sec.gov. These documents may also be
obtained free of charge from Strayer by requesting them in writing to 2303 Dulles Station Boulevard, Herndon, VA 20171. The documents filed by Capella with the SEC may be obtained free of charge at Capellas website at www.capellaeducation.com,
in the Investor Relations tab at the top of the page, or at the SECs website at www.sec.gov. These documents may also be obtained free of charge from Capella by requesting them in writing to 225 South 6th Street, 9th Floor,
Minneapolis, Minnesota 55402.
In connection with the proposed transaction, Strayer intends to file a registration statement on Form
S-4
with the SEC which will include a joint proxy statement of Strayer and Capella and a prospectus of Strayer, and each party will file other documents regarding the proposed transaction with the SEC. BEFORE MAKING
ANY VOTING OR INVESTMENT DECISION, INVESTORS AND SECURITY HOLDERS OF STRAYER AND CAPELLA ARE URGED TO CAREFULLY READ THE ENTIRE REGISTRATION STATEMENT AND JOINT PROXY STATEMENT/PROSPECTUS, WHEN THEY BECOME AVAILABLE, AS WELL AS ANY AMENDMENTS OR
SUPPLEMENTS TO THESE DOCUMENTS AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. A definitive joint proxy statement/prospectus will be sent to the stockholders of
each party seeking the required shareholder approval. Investors and security holders will be able to obtain the registration statement and the joint proxy statement/prospectus free of charge from the SECs website or from Strayer or Capella as
described above. The contents of the websites referenced above are not deemed to be incorporated by reference into the registration statement or the joint proxy statement/prospectus.
Certain Information Regarding Participants
Strayer,
Capella and their respective directors and executive officers may be deemed participants in the solicitation of proxies in connection with the proposed transaction. You can find information about Strayers directors and executive officers in
its definitive proxy statement for the 2017 Annual Meeting of Stockholders, which was filed with the SEC on March 16, 2017, and in other documents filed with the SEC by Strayer and its directors and executive officers. You can find information
about Capellas directors and executive officers in its definitive proxy statement for the 2017 Annual Meeting of Stockholders, which was filed with the SEC on March 23, 2017, and in other documents filed with the SEC by Capella and its
directors and executive officers. Additional information regarding the interests of these directors and executive officers in the proposed transaction will be included in the registration statement, joint proxy statement/prospectus or other
documents filed with the SEC, if any, when they become available. You may obtain these documents (when they become available) free of charge at the SECs web site at www.sec.gov and from Strayer or Capella as described above.
No Offer or Solicitations
This document shall not
constitute an offer to sell or buy or the solicitation of an offer to buy or sell any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933.
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