Dive Brief:
- Bridgepoint Education, a for-profit college operator, is bringing in John Semel as its new chief strategy officer to lead its acquisition plans as it looks to transition to an educational services model.
- Semel will take the lead on "industry research and analysis, along with financial evaluation and modeling for merger and acquisition opportunities," Bridgepoint said Monday in a press release. Semel previously served as chief strategy officer for in-store music provider Mood Media and for publisher Wiley, where he helped build its online business.
- Semel is set to receive a base salary of $450,00 and is eligible for an annual target bonus of 75% of his base, as well as an $85,000 sign-on bonus, according to a securities filing.
Dive Insight:
Semel brings years of business development experience as Bridgepoint prepares to spin off its Ashford University, which last year the company merged with its University of the Rockies. Bridgepoint has submitted plans to its accreditor that would convert Ashford to a separate nonprofit entity while the company would transition its remaining business to a technology and educational services model.
"His (Semel's) experience developing strategies that drive growth for organizations in the education industry, along with his investment and acquisition expertise, will help us meet our strategic objectives," Bridgepoint CEO Andrew Clark said in a statement.
Semel is part of a larger wave of incoming executives at the company. Late last year, Bridgepoint brought in Greg Finkelstein, who founded the OPM company Deltak and served as an "executive in residence" for a private equity firm. In January, the company announced the hire of Brian Bethune, previously director of continuing studies at Hamline University and a former dean at DeVry University, to be the strategic lead on instructional design for academic programs, curriculum development and learning technology.
Bridgepoint's revenue has been steadily waning for years. It fell more than 36% over five years, to $478.4 million in 2017, according to the company's latest annual report.
During that time, profits ranged widely. In 2013, Bridgepoint made $45.9 million in net income; in 2015, it saw a net loss of $70.5 million, which it followed with a $30 million loss the next year and a net gain of $10.5 million in 2017.
As with other for-profits (and colleges generally), revenue declines have followed enrollment declines.
From 2016 to 2017 alone, enrollment dropped nearly 10% to 40,730 students. Management attributed the decrease to low unemployment rates and regulatory scrutiny of the for-profit sector. (One bright spot for enrollment growth is Bridgepoint's corporate partnerships for employee training, which went from 6% of total enrollment in 2016 to 10% in 2017.)
Should Bridgepoint successfully separate Ashford as a nonprofit — a model gaining popularity with for-profits as they try to stabilize their bottom lines and seek cover from regulations — it may well use mergers and acquisitions to expand its reach and diversify its clientele. Grand Canyon Education did just that in its recent acquisition of healthcare program manager Orbis Education for $362.5 million. Until that deal, Grand Canyon University — which GCE used to operate — was the company's only client.
