xml:space="preserve">
xml:space="preserve">
Advertisement
Advertisement

Baltimore-based Laureate Education to sell off South American universities, Walden University

Baltimore-based Laureate Education Inc. is selling off much of its higher education network in Latin America with the planned sale of universities in Brazil, and also is exiting the U.S. market with a sale of Walden University.

The international higher education company said Sunday that it has agreed to sell its Brazilian operations to Ser Educacional S.A., a Brazil-based network of educational institutions, in a deal valued at $724 million at the current exchange rate and share value.

Advertisement

In addition, the company announced Friday that it plans to sell Walden University, an online college considered a pioneer in distance learning that offers doctoral, master’s, bachelor’s and graduate certificate programs. Laureate plans to sell Walden, its only U.S. business, to Adtalem Global Education Inc. for $1.5 billion in cash.

It also announced the completion Friday of a sale of its Chilean institutions.

Advertisement

Laureate, which started with one university in 1999 hoping to expand educational access in underserved parts of the globe, said in January that it would evaluate each of its businesses for a possible sale, spinoff or combination with another business. At that point, it was exploring the sale of its Peru, Mexico and Australia/New Zealand businesses.

Since then it has agreed to divest operations in Australia and New Zealand, as well as the U.S., Chile and Brazil. The recent announcements leave Laureate operating seven institutions in Honduras, Mexico and Peru, one in Malaysia and an online university in the United Kingdom.

The decision to sell in each case was based on commercial, geopolitical, regulatory and market factors, said Eilif Serck-Hanssen, Laureate’s president and CEO, in an announcement.

Baltimore, MD-11/14/17 - Eilif Serck-Hanssen is president and CEO of Laureate Education Inc.
Baltimore, MD-11/14/17 - Eilif Serck-Hanssen is president and CEO of Laureate Education Inc. (Amy Davis / Baltimore Sun)

In January, Serck-Hanssen had said Laureate was acting “from a position of strength, having improved our operations company-wide through significant cost and efficiency initiatives. At the same time, we believe that the public market undervalues our portfolio of assets compared to the values that could be realized for those assets in the private market or through other transactions.”

He indicated the company would continue seeking alternatives for its remaining businesses.

The company is selling the 11 higher education institutions it runs in Brazil, which together enroll more than 267,000 students in technical, undergraduate and postgraduate programs.

“We are incredibly proud of our Brazilian institutions and their enduring impact on the lives of their students," Serck-Hanssen said in the announcement. “They demonstrate the best of Laureate’s commitment to deliver quality at scale.”

The Brazil deal, scheduled to close toward the end of next year, includes the assumption of indebtedness, net of cash, which was $124.9 million as of June 30. Laureate will receive cash and shares of Ser Educacional and will become owner of about 44% of Ser Educacional shares. The Brazilian company will seek to list American depositary shares on a U.S. securities exchange.

The sale is subject to certain closing conditions, such as regulatory approval and completion of its depositary shares listing. The sales agreement includes a 30-day “go shop” period in which Laureate may solicit, encourage and enter into negotiations that may yield alternative acquisitions proposals. Ser Educacional has a right to match a superior proposal and to receive a fee if Laureate terminates the agreement to accept another bid.

Laureate said Friday that it completed the sale of its operations in Chile, where it had operated for two decades. That deal included a transfer of control of its not-for-profit institutions to Fundación Educación y Cultura, a Chilean nonprofit, and the sale of its for-profit operations.

The Baltimore firm sold Instituto Profesional AIEP in Chile to Universidad Andrés Bello in a deal valued at $214.6 million. It sold other Chilean assets, such as Instituto Profesional Escuela Moderna de Música to Fundación Educación y Cultura, for $3.6 million.

Serck-Hanssen said in Friday’s announcement of the closing in Chile that it is “the right time for Laureate to pass the torch to a dedicated in-country organization highly attuned to local constituencies and the changing regulatory landscape.”

Advertisement

Shares of Laureate’s stock, which have risen in recent days, closed down 51 cents Tuesday at $12.62 each.

Recommended on Baltimore Sun

Advertisement
Advertisement