American Public Education (APEI), parent of online learning provider American Public University System (APUS) and Hondros College of Nursing, is acquiring Rasmussen University, a nursing and health sciences-focused institution teaching more than 18,000 students at 24 campuses across six US states and online.

The consideration is $329 million, consisting of $300 million in cash and $29 million of non-voting preferred stock. APEI may substitute cash for the preferred shares at the time of closing.

APEI’s share price climbed more than 5% following the announcement.

APEI expects to fund the transaction with a combination of cash on hand of approximately $125 million, not including transaction costs, and up to $175 million of fully committed debt financing from Macquarie Capital.

Rasmussen is regionally accredited by the Higher Learning Commission and offers a full complement of degree programmes in nursing, health sciences, business, technology, design, education and justice studies. It offers traditional and competency-based programmes and is one of the largest providers of pre-licensure nursing programmes in the US with more than 8,200 nursing students.

Tom Slagle, chief executive of Rasmussen University, said: “Rasmussen University has a 120-year heritage of educating adult learners, and a comprehensive laddered nursing curriculum. Our emphasis on affordability and student outcomes with a strong connectedness to the employment market are attributes that strongly align with APEI’s overall mission, service to its students, and its value creation strategy.”

Angela Selden, chief executive of APEI, added: “We are very enthusiastic about the acquisition of Rasmussen, as it will add another number-one market position – pre-licensure nursing (ADN/RN and PN/LPN) – to our current number-one market position with APUS in serving military and veteran students.

“Collectively, Rasmussen and Hondros will be a nursing education powerhouse serving over 10,000 students. The transaction creates scale and diversifies APEI’s revenue with a mix that will consist of approximately one-third military and veterans, one-third nursing, and one-third online adult learners. From cultural alignment on affordable, inclusive, and high-quality education to strong regulatory track records, we believe the combination will be unparalleled in the industry.

“The entire leadership team, led by Tom Slagle for the last 10 years, has developed Rasmussen into a dynamic and growing institution through its student-centric approach and focus on delivering a high-quality education that meets the needs of students and employers. We at APEI look forward to working with Rasmussen to further the mission of the university and deliver value for all of its stakeholders.”

Atif Gilani, founding partner of Renovus Capital Partners, which acquired Rasmussen in 2019, said: “This transaction represents a unique opportunity for Rasmussen to combine forces with a respected leader in higher education creating a platform to meaningfully increase the number of licensed and highly-qualified nursing professionals in our communities and create more academic programmes at scale. We are pleased to have assisted in growing Rasmussen University’s best-in-class nursing and high-end healthcare programmes and improving Rasmussen’s operating results.” 

Renovus Capital Partners is a Philadelphia-area based private equity firm specialising in the knowledge and talent sectors.

Date published: 3 November 2020

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