Apollo Global, Inc., the wholly-owned subsidiary of
Apollo Education Group, Inc.
) has agreed to acquire 70% of the outstanding stock of Open
Colleges Australia Pty Ltd, known as Open Colleges. Open
Colleges is one of Australia's oldest and largest providers of
distance learning and the acquisition is in line with APOL's long
term strategy of global expansion. The acquisition is expected to
be completed by the second quarter of 2014.
According to the agreement, Apollo Global will purchase 70% of
the outstanding stock of Open Colleges in cash for about $98.5
million, along with a contingent payment of about $47 million
which will be based on 2014 operating results. The agreement
allows Apollo Global to purchase the rest of the 30% stock in the
Though Apollo Group has a dominant market position and focuses on
offering relevant career oriented educational programs, the
company had been witnessing weak enrollment in the U.S., which
resulted in a decline in revenue. The acquisition will thus allow
Apollo Global to access the growing education market in
Australia. The acquisition will allow the company to focus its
resources in the international education market, where better
results are expected.
Apollo carries a Zacks Rank #3 (Hold). Better-placed stocks in
the education sector include
ITT Educational Services Inc.
New Oriental Education & Technology Group
Xueda Education Group
). Both ITT Educational Services and New Oriental Education &
Technology Group carry a Zacks Rank #1 (Strong Buy), whereas
Xueda Education Group carries a Zacks Rank #2 (Buy).
APOLLO GROUP (APOL): Free Stock Analysis
NEW ORIENTAL ED (EDU): Free Stock Analysis
ITT EDUCATIONAL (ESI): Free Stock Analysis
XUEDA EDUC-ADR (XUE): Free Stock Analysis
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