[Updated (2/8/2016, 4:28 p.m.) with further details.]
The Apollo Education Group, the parent company of the for-profit University of Phoenix, will be sold to a “consortium of investors” for $1.1 billion, the company announced on Monday. The purchase, made by three investment firms, will make Apollo a privately held company.
It will also install a new chairman of the Apollo Board of Directors — Tony Miller, a former deputy secretary at the U.S. Department of Education and partner at one of the firms behind the deal, the Vistria Group.
The deal “will enable us to serve our students more effectively during a period of unprecedented volatility within our industry,” said the company’s chief executive, Greg Cappelli, in a news release.
Apollo announced it was exploring a sale in January. The company has in recent years reported declining revenue as enrollment at the flagship University of Phoenix has dropped.
The deal also comes amid heavy regulatory scrutiny of for-profit colleges. Last week Apollo said it had received a second subpoena from California’s attorney general, Kamala D. Harris, seeking information on “marketing, recruiting, compensation of enrollment advisers, complaints, financial aid, compliance, accreditation, other governmental investigations, private litigation and other matters, as well as additional information relating to marketing and services to members and former members of the U.S. military and California National Guard” from as far back as 2010.
That disclosure occurred weeks after the Department of Defense reinstated Phoenix’s eligibility for the federal Tuition Assistance Program, which provides financial aid to members of the armed services. The university had been suspended from the program amid allegations of improper recruiting practices.
The other two firms involved in the deal are the Najafi Companies and Apollo Global Management, which is not affiliated with the Apollo Education Group. The Vistria Group’s founder is Marty Nesbitt, a Chicago businessman and close personal friend of President Obama.
