Dive Brief:

  • For-profit college operator American Public Education Inc. plans to acquire the for-profit Rasmussen University, which enrolls 18,000 students in six states and online, for $329 million. 
  • The deal positions APEI as the largest national provider of pre-licensure nursing programs, according to the company, which also runs the American Public University System and Hondros College of Nursing.
  • It comes as for-profit colleges seek to expand in healthcare education.

Dive Insight:

The company says the deal will help set it up for future transactions. Buying Rasmussen also significantly expands APEI’s competency-based education programs, according to a company spokesperson. And it adds lower-tuition options, per SEC filings.

In commentary shared with Education Dive, BMO Capital Markets Senior Analyst Jeffrey Silber highlighted as headwinds for APEI “reduced and volatile military tuition funding,” along with competition online. But the pandemic is raising interest in its programs, Silber noted. 

Online adult learners will comprise one-third of APEI’s revenue. Total enrollment at primarily online colleges is up 6.7% this fall from a year ago, according to the latest data from the National Student Clearinghouse Research Center. Overall, undergraduate enrollment at four-year, for-profit colleges is ahead 3%. 

The transaction is expected to close in the third quarter of 2021, pending approval from regulatory bodies including the U.S. Department of Education and the Higher Learning Commission, Rasmussen’s accreditor. 

Rasmussen will remain a separately accredited entity after closing and will work with APEI via a shared services agreement. The APEI spokesperson said in an email that Rasmussen will be able to use a “shared services platform” that its other colleges use.

The deal helps APEI tap into strong job growth projected healthcare practitioners over the next decade. That demand stems in part from a shortage of qualified nurses in certain parts of the country. 

Two-thirds of Rasmussen students are in nursing or other healthcare programs. Together, Rasmussen and Hondros will educate more than 10,000 nursing students.

Other for-profit companies are eyeing the sector. In September, Adtalem Global Education announced it would buy Walden University from Laureate Education, another for-profit college operator, for $1.5 billion. More than three-quarters of Walden students are in health sciences programs. 

Morgan State University, in Maryland, is working with Salud Education to set up a medical school. The private company will be the primary operator and funder of the new school, according to the Baltimore Business Journal.

And Orbis Education, which helps colleges offer healthcare programs and is owned by the for-profit Grand Canyon Education, plans to have 40 locations by the end of 2021. That’s up from 23 in August, GCE executives told analysts during the company’s latest earnings call.

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