Apollo Education Buys Career Partner, Expands in Germany

Apollo Education Group, Inc.’s APOL, international division, Apollo Global, Inc., acquired Germany-based education provider, Career Partner GmbH (CPG) on Dec 10 for about $105 million. Career Partner is a provider of human resource development and private higher education.

This acquisition process was initiated on Oct 20, 2015 with Apollo Education entering into an agreement to acquire Career Partner. Apollo Global, a wholly-owned subsidiary of Apollo Education acquired the company for about $105 million. The transaction also includes a contingent cash payment of up to $12 million. This acquisition will help Apollo Global expand its footprint in Germany.

Apollo Education has recently been pursuing aggressive international expansion through Apollo Global to capitalize on stronger growth prospects. It is gaining traction on the back of international expansion through acquisitions.

Management expects Apollo Global to constitute a larger portion of its portfolio over the next five years. All international colleges at Apollo Global have shown significant progress in fiscal 2014 and 2015. Apollo Global reported breakeven cash flow in fiscal 2015. It has potential revenue run rate of more than 20% for the next five years.

However, Apollo Education’s flagship school, University of Phoenix (UOP) has been reporting low enrollment levels. Nevertheless, the company has undertaken several initiatives to transform UOP into a “smaller, but better performing” university.

Apollo Education Group carries a Zacks Rank #3 (Hold).

Stocks to Consider

Some better-ranked stocks in the education industry include Lincoln Educational Services Corporation LINC, New Oriental Education & Technology Group Inc. EDU and TAL Education Group XRS, each sporting a Zacks Rank #1 (Strong Buy).

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