e-Literate

Present is Prologue

Tag: Acquisition

  • First Board Meeting For Kaplan / Purdue University: Tuition Levels Set

    First Board Meeting For Kaplan / Purdue University: Tuition Levels Set

    Last week was the first meeting for the board of trustees for NewU, the working name for Kaplan University now that it has been “acquired” by Purdue University. And yes, the scare quotes are intentional given the $1 purchase price. I’ll give the group high marks for transparency by the press release.

    In its inaugural regular meeting, the Board of Trustees for Purdue’s new affiliated institution, currently referred to as NewU, approved plans to offer a dramatic tuition discount for Indiana resident students and free tuition for Purdue employees.  The new Indiana resident rate, also approved by Kaplan University’s trustees, will take effect at the beginning of KU’s next academic term. [snip]

    An Indiana resident student pursuing an associate or bachelor’s degree will pay the equivalent of $220, including technology fees, per quarterly credit hour, which is a discount of approximately 45 percent. The total cost to graduation for a bachelor’s degree would be $39,600, compared to a total cost to degree of $80,088 (including room and board) for Indiana residents at Purdue’s West Lafayette campus.

    The reason there are two boards of trustees involved – for NewU and for Kaplan U – is that the deal still must be approved by state and federal regulators and by NewU’s accreditor HLC. (more…)

  • Purdue University Deal To Acquire Kaplan University: Interview with Trace Urdan

    Purdue University Deal To Acquire Kaplan University: Interview with Trace Urdan

    The surprise news today is that Purdue University has agree to acquire the academic operations of Kaplan University. As stated in the 8-K filing by Kaplan University’s owner Graham Holdings:

    On April 27, 2017, Kaplan Higher Education LLC and Iowa College Acquisition, LLC (collectively, “Kaplan”), subsidiaries of Graham Holdings Company, entered into a Contribution and Transfer Agreement (“Transfer Agreement”) to contribute the institutional assets and operations of Kaplan University (“KU”) to a new, nonprofit, public-benefit corporation (“New University”) affiliated with Purdue University (“Purdue”) in exchange for a Transition and Operations Support Agreement (“TOSA”), pursuant to which, among other provisions, Kaplan will provide key non-academic operations support to New University for an initial term of 30 years with a buy-out option after six years.

    Additional coverage of the deal at The Chronicle, Inside Higher Ed, The Wall Street Journal.

    This is an unprecedented move, and to get some insight, I interviewed Trace Urdan, who has long covered higher education as an investment analyst and is one of the most knowledgeable observers of the for-profit sector. The following description is based mostly on this interview, paraphrasing Trace’s explanations and adding quotes in places. (more…)

  • Barnes & Noble Education Buys LMS Provider LoudCloud Systems For $17.9 Million

    Yesterday morning Barnes & Noble Education, the owner of 743 college bookstores and related services, announced the acquisition of LMS provider LoudCloud Systems for $17.9 million in cash. LoudCloud provides a traditional LMS for general higher education and K-12 needs, and they are best known for their customer Grand Canyon University, a for-profit provider and partial investor. LoudCloud from the beginning touted a modular approach to learning management systems, and one of their key modules is LoudBooks, an “adaptive and social” eReader of digital course materials. More recently, LoudCloud entered the competency-based education (CBE) market by releasing FASTRAK, an LMS specifically designed for CBE programs.

    According to LISTedTECH data, LoudCloud is used in a half dozen colleges and university accounts in the US, although these are mostly for-profits with multiple campuses.

    I have long heard discussions that LoudCloud was looking for an exit, so the acquisition of the company is not a surprise, per se. But why Barnes & Noble Education? I think that timing of the announcement helps answer that question.

    (more…)

  • Inside Higher Ed: One year after selling majority stake in company

    One year ago I wrote a post critical of Inside Higher Ed for not doing a blanket disclosure about the sale of a majority stake to a private equity firm with other education holdings (most notably Ruffalo Noel Levitz).

    Subsequent to the disclosure from the Huffington Post, IHE put up an ownership statement disclosing the ownership change and calling out that only editors are involved in editorial policies. The About Us page prominently links to this ownership statement.

    In an interview with Education Dive, Scott Jaschik (an Inside Higher Ed founder and editor) noted his regret for not disclosing the sale up front while concluding:

    “I guess I would just say to anyone who has questions, read us and read our coverage and call me if you think we’re doing anything that we shouldn’t,” [Jaschik] said.

    In the past year I have done exactly that – watching carefully for editorial shifts, complaining publicly about one article, and privately emailing Jaschik on another issue.

    My conclusion? Inside Higher Ed has shown no bias and no change in editorial policies based on the new ownership – they are living up to their word. IHE [Jaschik in particular] has also been quite good in discussing any questions or issues based on their coverage. IHE should be commended for their quality coverage of higher education news.

     

  • About Inside Higher Ed Selling Majority Stake

    Update 1/21: See link and blurb at bottom of post from new Editor’s Note at Inside Higher Ed.

    Last week the Huffington Post ran an article by David Halperin breaking the news that the private equity firm Quad Partners had acquired a controlling interest in Inside Higher Ed.

    Quad Partners, a New York private equity firm that is invested heavily in the for-profit college industry, and whose founder has aggressively opposed regulation of that troubled industry, has acquired a controlling stake in the respected trade publication Inside Higher Ed (IHE), which often reports on for-profit colleges and the policy disputes surrounding them. There has been no public announcement, but the Quad Partners website now lists Inside Higher Ed as one of its investments, among a range of education-related companies, including for-profit trade schools Beckfield College, Blue Cliff College, Dorsey Schools, Pacific College of Oriental Medicine, and Marinello Schools of Beauty.

    Doug Lederman, one of IHE’s two top editors, confirmed to me that Quad purchased a majority interest in IHE in November.

    Quad Partner James Tieng is now an IHE board member. Quad also owns the influential college admissions management company Noel-Levitz and other education technology companies that contract with colleges and universities — another sector that IHE covers.

    The rest of the article then goes full conspiracy theory, building off the for-profit connection of both Quad Partners and its founder. Halperin seems to believe mere indirect association with for-profits is evil and compromising in and of itself rather than finding any changes or compromises in IHE coverage.

    The bigger issue in my mind was described by Keith Button at Education Dive.

    While the list of potential conflicts of interest in such a sale is long, the fact that the deal wasn’t announced and the potential news coverage issues weren’t publicly addressed up-front raises more questions.

    (more…)

  • Blackboard Confronts Erosion of Market Share, Makes a Major Change in Strategy

    In a series of announcements that has the educational technology world buzzing, Blackboard reversed their strategy of their core LMS business.

    Most of the discussion in articles and blogs follows the meme of Blackboard entering open source, or even the meme of Blackboard acquiring competitors. I think the news is more significant than either of these two memes.

    Blackboard just did a 180-degree turn on their strategy for their core LMS business. They have moved from consolidating all customers into Learn 9.1 to providing products and services that are almost LMS-agnostic. As Dr. Chuck described:

    The notion that we will somehow find the “one true LMS” that will solve all problems is simply crazy talk and has been for quite some time.

    There is another aspect to this story not described in yesterday’s press releases and the associated articles and blogs. This is the first public strategic decision by Blackboard since they were acquired by Providence Equity Partners. I suspect that if you take all four of Blackboard’s announcements within the context of the private equity ownership, the underlying strategy and rationale make much more sense.

    (more…)