For-Profit Company Buys South U.

Education Management Corporation announced plans last month to buy the four campuses of South University for $50-million. The deal is the latest in a series of recent purchases made by large for-profit education companies attempting to broaden their course offerings in the health sciences.

In the largest such transaction, Career Education Corporation announced in March that it plans to buy Whitman Education Group for $230-million. When that deal is completed, Career Education will have acquired Whitman’s Ultrasound Diagnostic School system and additional colleges that offer nursing programs.

With a main campus in Savannah, Ga., and three other campuses in the Southeast, South University offers programs to train students for careers in nursing and medical technology.

It confers associate, bachelor’s, and master’s degrees, and expects to receive approval to offer doctorates in pharmacy by this summer.

“There’s a real niche for schools that can provide graduate-level education in health-related fields,” said John R. McKernan, president of Education Management. “We think there’s a real opportunity for expansion there, and South University has already begun to focus on that market.”

Education Management offers health-science programs only at a Minnesota campus of its Argosy University system; just 2 percent of the 44,000 students attending the company’s programs are training for health-science careers. Although the South University system is much smaller, with 1,500 students, all of its campuses offer training programs for health-related fields.

South University’s regionally accredited status from the Southern Association of Colleges and Schools, along with its locations in places where Education Management does not currently have campuses, made the purchase particularly attractive, Mr. McKernan said. Besides Savannah, South University has campuses in Montgomery, Ala., Palm Beach, Fla., and Columbia, S.C.

http://chronicle.com Section: Money & Management Volume 49, Issue 36, Page A31