Share price of DeVry Education Group Inc. (DV) reached a new 52-week high of $49.61 on Dec 29.
Shares have been rising ever since its subsidiary, DeVry Brasil announced its decision to buy two educational institutions in Brazil, thus further strengthening its foothold in the northern part of the country. The company already offers courses to more than 36,000 students on 15 campuses in this region.
Shares of the Illinois-based education company eventually closed at $49.02, yielding a solid year-to-date return of 41.2%.
Growth Drivers
On Dec 16, DeVry Brasil, agreed to buy Damásio Educacional for an undisclosed amount while on Dec 18, it agreed to buy Faculdade Ideal (Faci).
Operated by a private equity firm, Victoria Capital Partners, Damásio is one of the largest providers of test preparation for the bar examination in Brazil and also offers undergraduate and graduate law programs. Damásio is expected to generate revenues of approximately $50 million in calendar 2014. The acquisition is therefore expected to be modestly accretive to DeVry’s earnings in fiscal 2015. The transaction is expected to be completed in Feb 2015, subject to all regulatory approvals.
Meanwhile, the Faci acquisition is likely to close in the third quarter of fiscal 2015. Located in Belém, Pará, Faci offers career oriented undergraduate programs in education, accounting, law, technology and engineering to about 2,500 students.
DeVry Brasil operates through nine educational institutions in the northeastern regions of Brazil and is part of DeVry’s International and Professional Education segment. The segment has been doing quite well for the past few quarters. In the first quarter of fiscal 2015, revenues of this segment grew 22% year over year driven by higher revenues at both DeVry Brasil and Becker. While DeVry Brasil’s revenues grew 25% that of Becker Professional Education increased 18% from the year-ago period.
Stocks to Consider
DeVry carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the education industry include Strayer Education, Inc. (STRA), Lincoln Educational Services Corporation (LINC) and GP Strategies Corp. (GPX). While both Strayer Education and Lincoln Educational Services Corporation sport a Zacks Rank #1 (Strong Buy), GP Strategies holds a Zacks Rank #2 (Buy).
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