American Public Education, Inc. (APEI) recently entered into an agreement to fully acquire Ohio-based National Education Seminars, Inc., also known as Hondros College (Nursing Programs), for $46 million cash. The acquisition is expected to be completed in the fourth quarter of 2013.
Hondros College operates through four campuses located in Cincinnati, Columbus, Dayton and Cleveland. More than 1,500 students are offered various nursing programs including diploma in practical nursing (:PN), an associate degree in nursing (:ADN) and an online registered nurse to bachelor of science in nursing (RN - BSN) completion program.
The acquisition is in line with American Public’s long-term strategic plan of focusing on quality education, improving student retention and enhancing the quality of health, science and technology programs. Management believes that the acquisition will further consolidate APEI’s position in the healthcare, nursing and public education sector.
There is an increasing demand for medical courses due to improving prospects for doctors and veterinarians. The acquisition will therefore strengthen APEI’s position as a provider of medical courses and contribute to its revenue growth in the upcoming quarters. The second-quarter revenues missed the company's expectation as well the Zacks Consensus Estimate primarily due to lower-than-expected increase in total student enrollment.
APEI reported cash and cash equivalents of $128.1 million as of Jun 30, 2013. The acquisition, expected to be accretive to APEI’s full year 2014 earnings, will leave it with more than $80 million cash and cash equivalents.
American Public carries a Zacks Rank #3 (Hold).
Stocks that are currently better positioned and therefore worth considering include WebMD Health Corp. (WBMD), Brightcove, Inc. (BCOV) and Points International Ltd. (PCOM), all carrying a Zacks Rank #2 (Buy).
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