American Public (APEI) Buys Rasmussen, Boosts Nursing Footprint
American Public Education, Inc. APEI recently completed the acquisition of Rasmussen University (“Rasmussen”). Following the buyout, American Public Education has emerged as a major educator of pre-licensure nursing students in the United States. Rasmussen provides a full complement of degree programs in Nursing, Health Sciences, Business, Technology, Design, Education and Justice Studies.
The acquisition has diversified American Public Education’s revenue streams into nearly one-third military and veteran students, one-third nursing students and one-third online adult learners. Both the companies will have more than 110,000 students. This, in turn, is likely to generate nearly $90 million in adjusted EBITDA before synergies.
American Public Education president and CEO Angela Selden said, “With our current nursing footprint of 30 campuses across eight states and a full complement of nursing programs, we are well-positioned to help address the significant, long-term nursing shortage across the country, both now and over the next several years.”
The acquisition of Rasmussen will drive American Public Education results in 2021. Rasmussen is likely to generate revenues of roughly $275 million in 2021. Following the deal closure, Rasmussen will have cost savings of more than $5 million in the first 12 months and minimum of $10 million in the second and third year. It is worth mentioning that Tom Slagle, who has been the CEO since 2010, will continue to lead Rasmussen.
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Acquisition to Drive Enrollment
Although the coronavirus pandemic has affected most of the businesses, including the education industry, American Public has been witnessing an impressive enrollment growth over the past seven quarters. The uptrend is likely to continue driven by the acquisition.
American Public Education — which shares space with Laureate Education, Inc. LAUR, Universal Technical Institute, Inc. UTI and Strategic Education, Inc. STRA in the same industry — has undertaken several initiatives to improve enrollment trends.. The company has improved the quality of student mix, introduced new tools for students, and taken measures to increase student engagement and classroom interactivity. It has also launched competency-based programs under an initiative called APUS Momentum.
Shares of American Public — a Zacks Rank #5 (Strong Sell) company — have fallen 7.5% in the past three months compared with the industry’s decline of 38.5%.
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