World's Biggest For-Profit College Chain Plans $1 Billion IPOLeslie Picker and Devin Banerjee
Laureate Education Inc., the largest for-profit college network in the world, is interviewing banks for a $1 billion initial public offering in the U.S., people with knowledge of the matter said.
The company, whose honorary chancellor is former President Bill Clinton, has been meeting with potential underwriters for an IPO that could value the education juggernaut at about $5 billion, said the people, who asked not to be named discussing private information. The company, based in Baltimore, owns 84 universities, mostly in emerging markets.
Laureate was taken private in a management-led $3.8 billion buyout in 2007, backed by an investor group including KKR & Co. and Citigroup Inc. The company pursued an IPO three years ago, people familiar with the situation said then, which never materialized. It would be the the biggest school chain to go public, edging out Nord Anglia Education Inc., the second-biggest, which raised $350 million last year.
The market climate surrounding for-profit education could be better. The For-Profit Education Index of 13 companies, including DeVry Education Group Inc. and Apollo Education Group Inc., has plunged 55 percent through Wednesday since its peak five years ago. Enrollment has slowed amid recruiting abuses and student debt concerns, leading to a regulatory crackdown.
In the past six months, both Corinthian Colleges Inc. and Education Management Corp. were delisted from the Nasdaq Stock Market.
With a $5 billion market value, Laureate would be the second-biggest in the index, after Graham Holdings Co., which owns Kaplan test preparation services and online schools, as well as Foreign Policy magazine.
Matthew Yale, senior vice president of communications at Laureate, declined to comment on the company’s plans for an IPO, as did Kristi Huller, a spokeswoman for KKR.
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