August 16, 2017

Purdue University acquires Kaplan Online and 15 Campus locations for $1.00

In essence another for-profit to non-profit conversion of sorts.  Interesting way for Purdue to get into the online education sector.

Arlington-based Graham Holdings Co. has sold off its Kaplan University business — and its hundreds of millions in revenue — to Purdue University for just $1.

The deal will place the for-profit education systepurdue acquires kaplan universitym into a new nonprofit structure managed by West Lafayette, Indiana-based Purdue. The nonprofit will pay Graham to operate Kaplan University under a 30-year contract, but the nonprofit has the option to buy out that contract after six years.

Graham Holdings will also receive a share of the revenue generated from the new operation, but its too early to estimate how much that will be because it will be based on future revenue minus expenses.

The for-profit education system has faced several challenging years under the Obama administration, and many companies like Kaplan have been affected.

“I think we have built a very solid business over time. The reality of this is that it has been challenging. Why not put our two forces together and figure it out?” said Pinkie Mayfield, Graham Holdings vice president and special assistant to the chairman, in an interview. She said it would have taken Purdue years to build the type of functionality that Kaplan has been able to with its university system.

Kaplan Higher Education generated $617 million in revenue in 2016, so it represents a big chunk of Graham’s overall revenue, which was $2.5 billion in 2016.

 

link to article: https://www-bizjournals-com.cdn.ampproject.org/c/s/www.bizjournals.com/washington/news/2017/04/27/purdue-universitypaid-just-1-up-front-for-graham.amp.html 

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