Dive Brief:
- Adtalem Global Education announced Friday that it plans to buy the Minneapolis-based Walden University from Laureate Education for $1.5 billion in cash. The transaction is expected to close in mid-2021.
- The for-profit online university enrolls more than 50,000 students, focusing on working professionals, in a variety of bachelor's, master's and doctoral degree programs. More than three-quarters of Walden's students are in health sciences programs, a university spokesperson said in an email.
- The deal comes as Adtalem, formerly DeVry Education Group, expands its workforce education programming and as Laureate focuses on markets in Latin America.
Dive Insight:
The acquisition aims to help Adtalem "address the rapidly growing and unmet demand for healthcare professionals in the U.S. and globally," company officials said in a press release Friday. The company's healthcare portfolio includes the American University of the Caribbean School of Medicine, Chamberlain University and the Ross University schools of medicine and veterinary medicine.
A Barrington Research note shared with Education Dive said the acquisition makes Adtalem "an even more strategically focused business with significant scale in healthcare, an industry with extremely attractive tailwinds and market opportunities."
Increasing demand for healthcare workers is contributing to enrollment growth in Adtalem's medical and healthcare programs, CEO Lisa Wardell told analysts during the company's latest earnings call. Total enrollment in those offerings rose 6.9% year-over-year during its latest quarter.
Adtalem recently has taken other steps to grow its footprint in the healthcare sector. Earlier this year, Adtalem and Arkansas State University announced they were considering a partnership to open a veterinary school. The exploratory period for the partnership has been extended in light of the pandemic, an Adtalem spokesperson wrote in an email, adding that the proposed arrangement "is still on track."
The company also recently added training in how to provide virtual healthcare, and it plans to increase medical school-related partnerships with historically Black colleges and Hispanic-serving institutions.
Adtalem expanded its business services education programs through acquisition in 2019.
Buying Walden will give Adtalem a total of 26 campuses across 15 states and four countries, serving 90,000 students. Walden offers a variety of healthcare programs, including public health, healthcare administration, nursing, psychology and counseling.
Walden granted the most doctoral degrees of any institution to Black or African American students between 2014 and 2018, at 1,098, according to data from the National Science Foundation. Howard University, which ranked second, awarded just over a quarter the amount. But Walden has also been criticized for high debt levels among graduates and has faced allegations that recruiters misled doctoral students about how long it would take to complete their degrees.
The U.S. Department of Education and the Higher Learning Commission, Walden's accreditor, must still sign off on the deal. But Laureate's, Adtalem's and Walden's boards have already approved it.
Laureate, meanwhile, has previously considered selling Walden U. In 2019, the company offloaded its University of St. Augustine for Health Sciences to a Canadian private equity firm. Laureate CEO Eilif Serck-Hanssen said in a statement at the time that the company would hang onto Walden to keep a foothold in the U.S. professional services segment while expanding in Latin America.
