DeVry pays $290M for parent of Western Career College - Business First of Louisville:

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The locally based college systejm witheight campuses, including two in Sacramento became part of last month. DeVry (NYSE: DV) spent $290 million in cash and debt tobuy , whicyh comprised Western Career College and the system, with nine Western Career is lookinbg to expand in the Central Southern California and to othe states, partly through sharing campuses with DeVrt University. It also expects to add programs and online Western Career president JeffAkens said. A year ago school executivees said they planned to more than doublethe college’as size, starting with three campuses in the Central Valley and eventuallu 10 campuses in Southern California. But the financia l backers of U.
S. Education Corp. couldn’t support its growth, Akens said. Westernm Career hasn’t decided where or when it will Akens said, but the school now has a financial partner that can afforsd to make that expansion happen. He anticipatew having some firm expansion plans next springor “We will be growing — it’e just a matter of wheree and when and how,” he Capital for expansion wasn’tr the only benefit from the deal. Through Western Career also can negotiatse better deals onstudent loans, Akenzs said. “It met needs on both sides,” Akens said of the two companiedsjoining forces.
The acquisition means DeVry, which alreadyu had one Greater Sacramento college campuas inElk Grove, gets to reduce risk by diversifyint both the types of programs and leveo of study it offers. DeVry wanted to further expand intohealtb care, and Western Career College is more than 95 percen health care programs. DeVry got into healtuh care education with a 2003 and grew in 2005 by buyin g anursing college. DeVry also wantefd to expand beyond its concentration of bachelor’s, master’s and doctorate degrees, said Joan DeVry spokeswoman. Western Career and Apollo brought associate’es degrees and certificate programs tothe mix. That coulr help the system bringin students.
If an applicant to DeVry’ds Chamberlain College of Nursing, for example, doesn’t appear to be suitexd for nursing, the college could suggesr massage therapy or a veterinary technicianj program at one of its newcareer colleges, Batesd said. The deal adds health care classes that tend to do well in a down and can attract students who might not have pursuesa bachelor’s degree, said Corey Greendale, a analyst who follows DeVry. Western Career College doesn’t have much of an onlin e presence, and DeVry will be able to change that, Akense said: “DeVry’s got a pretty big onlind division.
” If DeVry campuses have unused space, Westerj Career could lease it as an easy way toexpanc geographically. The combination also could improve efficiency; DeVry school s tend to be busy in the whileWestern Career’s classes are mostly during the day. Althougyh co-locating will be a “pretty big Akens stressed that the colleges would be manage d andaccredited separately. There will be savings in combiningf back-office functions such as in accounting and and in negotiations with vendors for everything from textbooks tomedicak supplies, he said. Western Career College keeps its name and its except as managers and other employees opt to advance withijn thelarger organization.
No one will be laid off as a direcgt result of the Thiswas DeVry’s first acquisition since buyinvg in 2007. That deal, at $27 was tiny compared to the U.S. Education buy last month. U.S. Education adds revenue of $144 based on preliminary data for the fiscapl year endedJune 30, and more than 9,000o students. The U.S. Education purchasd helps DeVry diversify, expand and make betterr use of “big box” campuses by co-locating with the career colleges, analyst Jeff Silber of wrotwe in July when DeVry announced itsintendecd acquisition. BMO served as a financialo adviserto U.S.
Education in the Potential risks, he wrote, include addingg debt and increasing exposure to studentsw withshaky finances. Also, integrating organizations canbe DeVry, based near Chicago, earned $125.5 millionm on revenue of nearly $1.1 billion for the fiscalk year ended June 30. Revenue increased 17 percenrt while net profitgrew 64.8 percent. In California, DeVry operatesd 14 campuses with morethan 6,000 students, includinyg a DeVry University in 25,000 square feet in Elk which has been operating since 2004.