Administration

U. of Phoenix Parent Company Sells Its Online High-School Business to Kaplan

February 25, 2011

The Apollo Group Inc., parent company of the University of Phoenix, has quietly sold its online school business, Insight Schools Inc., to one of its chief rivals, Kaplan Inc.

The deal, completed earlier this month, comes as both companies face continued pressure from government regulators on their larger higher-education businesses. Neither company would disclose the price but said it was not large enough to be a "material" factor in their overall finances.

Apollo bought Insight in 2007 and had announced more than a year ago that it would try to sell it. Insight operates as an online-education provider for public-school systems and charter schools, receiving its revenues from those systems and schools. It also runs an online private school called Olympus High School. The K-12 online-education market is now far smaller than the higher-education market, but it is projected to grow.

Insight, founded in the mid-2000s, is older than Kaplan Virtual Education, the name for Kaplan's online-school venture, which includes a private school, an online "homeschool" program, a public-high-school operation, and a school for working adults. In 2007 Kaplan bought a company called Sagemont Virtual, which then ran a school called the University of Miami Online High School and a company that develops online high-school courses.

Insight, with about 7,500 students, is more than twice the size by enrollment of Kaplan Virtual Education, according to a Kaplan spokesman, Mark Harrad. He said his company had not decided whether to rebrand the Kaplan schools under the Insight or Olympus name. He also said Kaplan's decision to invest in expanding its K-12 businesses was not related to the heightened regulatory attention on its higher-education operations.