APOL Apollo Education Grp., Inc.

In a recent development, the Phoenix based private education provider, Apollo Group Inc. (APOL), has completed the acquisition of Downtown based math curricula publisher, Carnegie Learning plc, Business Journal reported. The deal is expected to boost students' retention and graduation rates.

The deal is valued at $96.5 million, of which Apollo has paid $75.0 million in cash 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 over the next 10 years towards the acquisition of related technology from Carnegie Mellon University.

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 strengthen the student's 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.

 
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