Education Corporation of America (ECA), one of the largest for-profit institutions in the United States, is set to obtain all 38 Kaplan College campuses belonging to Kaplan Higher Education. Graham Holdings owns Kaplan Higher Education and runs the predominantly online Kaplan University.
According to the Washington Post, the deal, "made public Thursday in a Securities and Exchange Commission filing, includes all Kaplan College campuses."
The deal is reported to be an "all-stock transaction" for the campuses and will give Kaplan " preferred equity interest" in ECA, writes Street Insider, but the specific terms of the deal are undisclosed.
"This purchase is an exciting opportunity for Education Corporation of America," said Stu Reed, Chief Executive Officer of Education Corporation of America. "The Kaplan College campus portfolio offers programs that are a great fit with our Virginia College campuses, and are accredited by the same accrediting body, Accrediting Council for Independent Colleges and Schools (ACICS)"
There is very little overlap, geographically speaking, with the new campuses acquired and the old campuses, which provides more geographical coverage for Education Corporation of America. The change of ownership is said to be "relatively seamless" and will happen within the next 90 to 180 days when the transaction is closed.
"Education Corporation of America operates Virginia College, Golf Academy of America, Ecotech Institute, and New England College of Business. Its Virginia College offers associate's, bachelor's and master's degrees in career-focused programs, through 27 campuses located primarily in the southeast as well as online programs."
The deal will add 12,500 students to ECA's operations. ECA will now operates "70 career oriented campuses" across 20 states and has 30,000 students, which include the students enrolled online.
"Kaplan College Campuses, which also include Kaplan Career Institutes, TESST College of Technology and Texas School of Business locations, will be acquired by Education Corporation of America."
Biz Journal reports that Kaplan Higher Education will continue to operate Kaplan University and other professional schools that they run including Concord Law School, the Schools of Business and Information Technology, General Education, Health Sciences, Nursing, and many more.
The Washington Post reports that Kaplan had a revenue of $275 million but an operating loss of $12.5 million in 2014.
Kaplan chief executive Thomas C. Leppert said in a statement that Kaplan believes that Education Corporation of America presents an "optimum match for the Kaplan College Campus portfolio of institutions and programs" that will hopefully bring benefits to everyone involved.
Kaplan college includes programs in Allied Health, Business, Criminal Justice, Legal Studies, Information Technology, Nursing and various trade programs.