Apollo to Acquire Carnegie Learning - Analyst Blog
August 03 2011 - 1:50PM
Zacks
One of the world's largest private education providers,
Apollo Group Inc. (APOL), in streak to enhance
students' retention and graduation rates, has recently entered into
an agreement to acquire Downtown based math curricula publisher,
Carnegie Learning Plc.
The deal is valued at $96.5 million, of which $75.0 million will
be paid for the acquisition of 100% stock of Carnegie Learning plc
along with Cognitive Tutor math software. In a separate
transaction, a sum of $21.5 million will be paid toward the
acquisition of related technology from Carnegie Mellon University.
The transaction is expected to be completed by October 2011.
Founded by a team of cognitive and computer scientists of
Carnegie Mellon University and some expert mathematicians, Carnegie
Learning came into existence in 1998 and is currently providing
math instructions to more than 600,000 students in 3,000 schools
nationwide.
As per the terms of the deal, Carnegie Learning will continue to
provide innovative learning tools for the K-12 students of Apollo
Group. The company believes that mathematics is an important
subject, which the students of this generation must excel to
compete in such a fierce competitive environment. Therefore, Apollo
wants to integrate adaptive learning technology of Carnegie
Learning into instructional, evaluation and problem-solving
activities of the institution to enhance the theoretical
understanding in mathematics.
Moreover, Apollo Group expects the acquisition to add 7 cents to
9 cents per share to earnings in fiscal 2012.
Apollo Group faces intense competition from other companies
offering postsecondary education, such as DeVry
Inc. (DV), Strayer Education Inc. (STRA)
and Career Education Corp. (CECO).
Apollo's shares maintain a Zacks #3 Rank, which translates into
a short-term Hold rating. Our long-term recommendation on the stock
remains Neutral.
APOLLO GROUP (APOL): Free Stock Analysis Report
CAREER EDU CORP (CECO): Free Stock Analysis Report
DEVRY INC (DV): Free Stock Analysis Report
STRAYER EDUC (STRA): Free Stock Analysis Report
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