For-Profit College Companies Make Massive Merge

REUTERS/Mohamed Abd El Ghany

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Rob Shimshock Education Reporter
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Two for-profit college providers announced a massive merge Monday with a $2 billion deal, which will make it one of the biggest providers of for-profit education in America.

Capella Education Co. and Strayer Education Inc. will combine to form one company in which Strayer will hold 52 percent ownership, reported The Washington Post.

Strayer has fared slightly better than Capella during the past year. The company’s shares grew by 63 percent and holds a market value of approximately $1 billion. A 7 percent surge in enrollment puts its enrollment at 41,679 students.

Capella’s stock, meanwhile, has fallen 7 percent. But the company boasts a bigger variety of programs than Strayer and three-quarters of its students are seeking doctoral or master’s degrees.

“Strayer and Capella complement each other in powerful ways,” said Kevin Gilligan, chief executive and chairman for Capella, in a statement obtained by The Washington Post. “Uniting Strayer University’s degrees in business…accounting, economics and information technology with Capella University’s competency-based flexible degree programs, health care offerings and robust doctoral portfolio will help us better meet the educational needs of students in the modern economy.”

Gilligan will assume the role of vice chairman at the merger, which will be called Strategic Education Inc. and Karl McDonnell, Strayer’s chief executive, will continue in that capacity for the new company. The merger will retain Strayer’s STRA ticker symbol, reported ABC News.

The merger will need approval from both Virginia, as well as the federal Department of Education. An Education Department spokesman declined comment when contacted by The Daily Caller News Foundation.

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