Apollo Group and the Carlyle Group form $1 billion joint venture to make investments in the international education services sector

GlobalHigherEd was established on 1 September 2007. Since then we have been profiling (often through the “graphic feed” mechanism) some of the broader structural forces, trends and outcomes that are emerging in the context of the globalization of higher education services.

These transformations are also evident in the form of news releases. On Monday 22 October these news releases (link to Apollo and Carlyle) were circulated at a global scale, extracts of which are pasted in below. This development highlights the nature of unmet demand for higher education services in select regions and countries, as well as the role of the private sector in providing (or planning to provide) higher education services when state capacity to provide said services is limited, by accident or design. See these links for further media and blog coverage regarding this significant development. Carlyle is the (in)famous private equity firm associated with numerous Washington DC political power-brokers. See Tegenlicht’s 48 minute long Dutch/English video The Iron Triangle – The Carlyle Group Exposed (2004), though also be sure to examine this February 2007 BusinessWeek analysis of how the Carlyle Group is now seeking to diversify its activities (and in the process become less of a political flashpoint).

apolloshares.jpg

Apollo, a listed firm (see its share history above), operates the US’ largest university – private for-profit University of Phoenix, with approx. 250,000 students. This news release comes one week after the Financial Times noted that US-based Bridgepoint Education is planning to enter the UK’s higher education scene, spurred on by the “level playing field” dynamic generated by top-up fees in the UK, and the relatively large proportion of foreign students who continue to be drawn to the UK (see this link for an interview with Bridgepoint’s CEO, and the OECD’s Education at a Glance 2007 for data on foreign student mobility patterns).

The press release about the formation of “Apollo Global” states:

Apollo Group and the Carlyle Group Form $1 Billion Joint Venture to Make Investments in the International Education Services Sector

PHOENIX & WASHINGTON–(BUSINESS WIRE)–Oct. 22, 2007–Apollo Group, Inc. (Nasdaq:APOL) (“Apollo Group” or the “Company”), and private equity firm The Carlyle Group (“Carlyle”), today announced that they have formed a $1 billion joint venture, Apollo Global, Inc. (“Apollo Global”). Apollo Global intends to make a range of investments in the international education services sector. Apollo Global will target investments and partnerships primarily in countries outside the U.S. with attractive demographic and economic growth characteristics. Apollo Group has committed up to $801 million and will own 80.1% of the joint venture. Carlyle has committed up to $199 million and will own 19.9% of Apollo Global. Investments and funding will be subject to approval by the respective investment committees of both Apollo Group and Carlyle. Apollo Global will be a consolidated subsidiary of Apollo Group and Greg Cappelli, Apollo Group’s Executive Vice President and Director will be Chairman of the subsidiary.

Commenting on the new venture, Greg Cappelli said, “We are very excited about this new joint venture and our partner, The Carlyle Group. Our core competencies in the education space, combined with Carlyle’s industry relationships and strategic assets across the global education sector, will allow us to successfully capitalize on the tremendous global opportunity that exists in the marketplace.”

Brian Mueller added, “We will continue to invest capital in our high return core domestic business, and through Apollo Global, we will also explore strategic and value creating global acquisition opportunities. Importantly, we reiterate that any investment must meet our disciplined investment criteria as we remain committed to creating long-term value for our shareholders.”

Brooke B. Coburn, Managing Director and Co-head of Carlyle Venture Partners III, L.P., said, “Global demand for higher education is strong. Apollo Group’s operational expertise coupled with Carlyle’s global network make this a powerful partnership.”

About Apollo Group, Inc.

Apollo Group, Inc. has been an education provider for more than 30 years, operating the University of Phoenix, the Institute for Professional Development, the College for Financial Planning, Western International University and Insight Schools. The Company offers innovative and distinctive educational programs and services at high school, college and graduate levels at 259 locations in 40 states and the District of Columbia; Puerto Rico; Alberta and British Columbia, Canada; Mexico and the Netherlands, as well as online, throughout the world.

About The Carlyle Group

The Carlyle Group is a global private equity firm with $75.6 billion under management committed to 55 funds. Carlyle invests in buyouts, venture & growth capital, real estate and leveraged finance in Africa, Asia, Australia, Europe, North America and South America focusing on aerospace & defense, automotive & transportation, consumer & retail, energy & power, financial services, healthcare, industrial, infrastructure, technology & business services and telecommunications & media. Since 1987, the firm has invested $32.3 billion of equity in 686 transactions for a total purchase price of $157.7 billion. The Carlyle Group employs more than 900 people in 21 countries. In the aggregate, Carlyle portfolio companies have more than $87 billion in revenue and employ more than 286,000 people around the world. http://www.carlyle.com.

Also see 23 September Inside Higher Ed and Chronicle of Higher Education stories on this development.

Kris Olds

2 thoughts on “Apollo Group and the Carlyle Group form $1 billion joint venture to make investments in the international education services sector

  1. Pingback: University rankings: deliberations and future directions « GlobalHigherEd

  2. We are the IEDUCARE, Institute of Education, began the activities in 2004, are currently in over 30 cities in the state of Ceara – Brazil, we both courses such as Graduate end Post-Graduate in partnership with accredited institution, we have currently about 3 thousand students in them. We are in the process of free expansion in both the state as outside it, being invited to open classes in various cities considered in these key states. To that end, we are in the process of accreditation with the Ministry of Education – MEC, but we continue to have its own building and structured to provide the support required for the expansion we desire. We have our advantage throughout the credibility of our brand and, above all, knowledge in the field of education.
    Regards
    Ilso Stopassola da Silva – Ieducare

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