American Public Education, Inc. Announces Transformational Deal to Acquire Rasmussen University, the Largest Educator of ADN Nurses

Combination will nearly double APEI’s revenue to approximately $600 million(1)

APEI will become #1 educator of pre-licensure nurses (ADN/RN and PN/LPN)(2) with over 10,000 nursing students

Purchase price is $329 million, consisting of $300 million in cash plus $29 million in preferred shares, which represents the value of expected tax step-up benefits

Rasmussen expects 2021 pro forma net income of $7 million and EBITDA(3) of approximately $44 million

Post-acquisition APEI expects to have approximately $31 million of net income and approximately $100 million of Adjusted EBITDA(3) for 2021

American Public Education, Inc. parent company of online learning provider American Public University System and on-ground, pre-licensure Hondros College of Nursing  announced that it has entered into a definitive agreement to acquire Rasmussen University, a nursing- and health sciences-focused institution serving over 18,000 students at its 24 campuses across six states and online.

Angela Selden, chief executive officer of APEI, stated, “We are very enthusiastic about the acquisition of Rasmussen, as it will add another #1 market position — pre-licensure nursing (ADN/RN and PN/LPN) — to our current #1 market position with APUS in serving military and veteran students. Collectively, Rasmussen and Hondros will be a nursing education powerhouse serving over 10,000 students. The transaction creates scale and diversifies APEI’s revenue with a mix that will consist of approximately one-third military and veterans, one-third nursing, and one-third online adult learners. From cultural alignment on affordable, inclusive, and high-quality education to strong regulatory track records, we believe the combination will be unparalleled in the industry. This acquisition amplifies our brand promise to provide our students with a Higher Education Return on Investment or ‘HEROI’.”

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The acquisition of Rasmussen represents a significant step in positioning APEI that began a year ago and has included a return to growth at APUS and a turnaround at Hondros. This transaction provides important scale benefits and helps establish APEI as a platform for additional transactions that can create meaningful synergy opportunities over time.

Rasmussen is regionally accredited by the Higher Learning Commission (HLC) and offers a full complement of degree programs in Nursing, Health Sciences, Business, Technology, Design, Education and Justice Studies. Rasmussen offers both traditional and competency-based programs online and through its 24 on-ground campuses in six states.  With over 8,200 nursing students, Rasmussen is one of the largest providers of pre-licensure nursing programs in the United States. Rasmussen’s pre-licensure nursing programs have grown at a 16% five-year compound annual growth rate.

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“Rasmussen University has a 120-year heritage of educating adult learners, and a comprehensive laddered nursing curriculum. Our emphasis on affordability and student outcomes with a strong connectedness to the employment market are attributes that strongly align with APEI’s overall mission, service to its students and its value creation strategy,” said Tom Slagle, CEO of Rasmussen University.

Ms. Selden added, “The entire leadership team, led by Tom Slagle for the last 10 years, has developed Rasmussen into a dynamic and growing institution through its student-centric approach and focus on delivering a high-quality education that meets the needs of students and employers. We at APEI look forward to working with Rasmussen to further the mission of the University and deliver value for all of its stakeholders.”

“This transaction represents a unique opportunity for Rasmussen to combine forces with a respected leader in higher education creating a platform to meaningfully increase the number of licensed and highly-qualified nursing professionals in our communities and create more academic programs at scale,” said Atif Gilani, founding partner of Renovus Capital Partners, which acquired Rasmussen in 2019. “We are pleased to have assisted in growing Rasmussen University’s best-in-class nursing and high-end healthcare programs and improving Rasmussen’s operating results.”  Renovus Capital Partners is a Philadelphia-area based private equity firm specializing in the Knowledge & Talent sectors.

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