- A group of investors has agreed to purchase Apollo Education Group, owner of the for-profit college chain University of Phoenix, in a $1.1 billion cash deal.
- The New York Times reports that the buyers include Chicago-based investment firm Vistria Group, whose founder, Marty Nesbitt, has close ties to President Barack Obama and Commerce Secretary Penny Pritzker, and whose COO, Tony Miller, served as deputy secretary of the Obama Department of Education from 2009 to 2013.
- While the investors hope to help clean up the for-profit industry with the purchase and plan to run the University of Phoenix with “the highest ethical standards,” critics of the sector and the purchase say the new team will have trouble doing so, given their obligations to shareholders — especially as they bought out Apollo Education Group shares for about 30% more than its stock was worth on the market.
Vistria Group’s Tony Miller will take over as chairman of Apollo Education Group in August. Once the deal is completed and the company is fully private, far less information will have to be reported publicly. Depending on how transparently the new owners run the company, it might be harder to tell in the coming years how Phoenix is doing financially and what sanctions or lawsuits it is facing.
Besides Vistria, the group of investors also includes the Najafi Companies, out of Phoenix, and Apollo Global Management, a non-related entity first reported to be in sale talks with the education company. The new owners will have their work cut out for them, as Phoenix has been overseeing years of declining enrollment amid harsher regulation from the Department of Education, legal investigations by the Federal Trade Commission and the California attorney general’s office, and scrutiny from the Pentagon following a brief ban on recruitment at military bases.