University of Phoenix Backers Raise $136 Million in IPO

(Bloomberg) -- Shareholders of Phoenix Education Partners Inc., the owner of the University of Phoenix, raised $136 million in an initial public offering, pricing the shares in the middle of a marketed range.

Apollo Global Management Inc. and Vistria Group sold a combined 4.25 million shares of Phoenix Education for $32 each after marketing them for $31 to $33, according to a statement Wednesday.

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At that price, Phoenix Education has a market value of $1.14 billion based on the outstanding shares listed in its filings with the US Securities and Exchange Commission.

The IPO is among the last receiving SEC approval ahead of the US government shutdown, bringing the long-awaited IPO revival to a halt and putting billions of dollars worth of deals on hold.

Founded in 1976, University of Phoenix offers online learning including bachelor’s and master’s degrees in subjects including business, health care and education. The university reported 76% of its students were still employed while enrolled at the school during its 2024 fiscal year, and 71% were female, the filings show. Its six-year graduation rate for the 2018/2019 cohort was 37%.

In June, the company walked away from a $550 million deal to sell University of Phoenix to another school. The majority owner of the Arizona-based university paid a $12.2 million fee to the University of Idaho in June after terminating a 2023 agreement to sell most of its assets, according to its filings.

Phoenix Education had net income of $113.1 million on revenue of $950 million for the fiscal year ended Aug. 31, 2024, compared with net income of $64.9 million on revenue of $835.2 million in the same period the year earlier, the filings show.

Apollo Education Group, the predecessor of the current firm, was taken private in 2017 by funds affiliated with Vistria and Apollo in a $1.1 billion deal.

In 2019, the Federal Trade Commission reached a settlement with the University of Phoenix over aggressive marketing practices relating to a campaign several years prior to its take-private by Apollo and Vistria. Before the ownership change, the company had been under fire for lower-quality degree programs, Bloomberg News reported in 2021.

The offering is being led by Morgan Stanley, Goldman Sachs Group Inc., Bank of Montreal, Jefferies Financial Group Inc. and Apollo Global Securities. The company plans for its shares to trade on the New York Stock Exchange under the symbol PXED.

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