Laureate Education has sold its Australia and New Zealand portfolio to Strategic Education for $643 million, as the US-listed private university operator continues apace with its divestment strategy.

The all-cash transaction, which has been approved by both companies’ boards but is subject to “potential adjustments”, will see US-based Strategic Education take control of Torrens University Australia, Think Education and Media Design School, which collectively cater to more than 19,000 students.

Following the transaction, which is expected to close in the first quarter of next year, Strategic Education will serve nearly 110,000 students across more than 85 campuses in the US, Australia and New Zealand.

After the deal was announced, Laureate climbed 14% while Strategic Education tumbled 17%.

Strategic Education said that the transaction will diversify its offering outside of the US and “be immediately, and significantly, accretive” to earnings.

Karl McDonnell, chief executive of Strategic Education, said: “By combining our expertise in digital education with Australia’s only investor-funded university, we will create a formidable growth platform that will enable us to pursue our mission of enabling economic mobility throughout the Oceania and Asian regions.”

BofA Securities acted as financial advisor to Strategic Education and Hogan Lovells provided legal advice.

The transaction represents the latest link in a chain of divestments by Laureate, which has in recent years offloaded universities across Asia and elsewhere to clear from its balance sheet debt incurred by its former private equity owners. 

Earlier this month, it was reported that Laureate was considering selling its assets in Brazil.

In March, the company sold its Malaysian portfolio to Hong Kong-based HOPE Education for $140 million.

In 2015, Laureate’s debt-to-equity ratio stood at 13. Now, this figure stands at 0.83.

Date published: 29 July 2020

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