Laureate Education Divests Billions in Assets

Laureate Education has sold large swathes of its assets in an effort to explore different business options and unlock shareholder value. As of September 13, 2020, Laureate announced the sales of their Brazilian and Chilean operations. This news followed the sale of Walden Unversity to Adtalem Global Education on the 11th. The combined sales are worth just under $2.5 billion.

In their 2019 annual report, Laureate claimed to hold the “largest portfolio of degree-granting higher education institutions.” The company also owns Laureate International Universities, home to 150 campuses in 10 different countries. Founded by Douglas L. Becker in 1998, the public benefit corporation has found it challenging to keep their debt to a minimum in recent years.

Laureate Education Sells Walden University, Along with Brazilian and Chilean Assets

Laureate Education passed along their Chilean entity, through the transfer of control of its non-profit institutions, to Fundacion Educacion y Cultura. This also includes the sale of their for-profit operations, Instituto Professional AIEP to Universidad Andres Bello. This transaction was valued at $214. million USD  while the sale of the other assets was estimated at about 3.6 million USD.

President and Chief Executive of Laureate Education, Eilif Serck-Hanssen, is optimistic that this transaction will further help Chilean students across all institutions. “This is the right time for Laureate to pass the torch to a dedicated in-country organization highly attuned to local constituencies and the changing regulatory landscape,” Serck-Hanssen stated. “Operating these institutions at a national level should deliver strong outcomes for students and the country.”

Also announced on the same day, Laureate announced its transfer of Walden University to Adtalem. This transaction was valued at 1.48 billion dollars and is set to close in the first quarter of the fiscal year 2022 (subject to regulatory approvals and other customary closing conditions).

Two days later, Laureate announced the sale of their Brazilian operations to Ser Educational S.A. This institution is already well respected in Brazil as it shows its students that they value and want to expand their personal and professional growth.

Consolidating and Moving Forward

Already operating 11 higher education institutions in Brazil alone, Laureate enrolls more than 267,000 students in undergraduate and postgraduate programs. The sale is estimated at USD 724 million (at current exchange rate) and shows that Laureate will receive about $1.70 billion R in cash and 101,138,369 shares of Ser Educational. The transaction is subject to regulatory approval and other closing conditions. It is set to finalize towards the end of 2021.

The selling of these assets will not only benefit said institutions as well as Laureate. The institutions located in different parts of the world will now experience a different kind of leadership that will continue the momentum when providing accessible graduate/undergraduate courses. Not only that, but Laureate will start to make a dent into decreasing their debt. As more opportunities become available, they will acknowledge the impact made on their company and the institutions they help build by selling these assets.

Featured Image: Wikimedia Commons.