Educational services company Strayer has announced that it will be merging with a fellow industry operator, Capella education, in a deal worth $1.9bn.
The two companies will combine to create a leading for-profit education company, with the institutions of Strayer University and Capella University together serving approximately 80,000 students across the United States.
“Uniting Strayer University's degrees in business, including the Jack Welch Management Institute, accounting, economics, and information technology with Capella University's competency-based flexible degree programs, healthcare offerings, and robust doctoral portfolio will help us better meet the educational needs of students in the modern economy,” said Kevin Gilligan, Chairman and Chief Executive Officer of Capella.
Strayer will be the corporate identity that the two universities will work underneath following the merger, with Strayer shareholders owning 52% to Capella’s 48%.
“We are delighted to have the opportunity to combine Capella's capabilities with Strayer's 125-year heritage of educating working adults,” said Robert Silberman, Executive Chairman of Strayer. “This transaction will enhance our collective ability to deliver better academic outcomes, to more working adults, at more affordable prices.”
Both universities will retain their separate Boards that will be led by their current Presidents, however, the two institutions will now work together to accelerate innovation across the new combined platform.
“This combination will allow us to accelerate investment in the educational experience we deliver to students at both universities, while achieving back office efficiencies captured through the merger of our corporate functions,” said Karl McDonnell, Chief Executive Officer of Strayer.
The sum of $1.9bn see’s Strayer paying a 22% premium on the all-stock merger, with Capella shareholders receiving 0.875 Strayer shares for each Capella share.