Dive Brief:
- Perdoceo Education plans to acquire South University for up to $140 million in cash and other terms, the company announced Monday. The deal represents South’s fourth change in control in less than a decade.
- The boards of both entities have approved the deal, and Perdoceo expects to finalize the acquisition as early as April 2027, pending regulatory and accreditor approval.
- The company plans to invest in South University’s licensure exam prep and clinical placement for the university’s graduate students as well as faculty, program leadership and instructional technology.
Dive Insight:
In its announcement, Perdoceo said the acquisition would “firmly establish” its graduate offerings in the health science fields.
South University, originally founded in 1899, brings to the deal licensure-based offerings, including master’s programs in physician assistant studies, anesthesiology and nursing, as well as a pharmacy doctorate and a bachelor’s and doctorate in nursing.
As of December, the university had around 10,500 students across its 11 campuses — all based in southern U.S. states — and online operations, according to Monday's announcement.
Along with the initial cash price, Perdoceo could pay up to $56 million for the acquisition in future payments based on earnings performance over the next three years. The cash price at closing could vary between $130 million and $140 million based on certain balance sheet metrics for South. The deal may be called off if not completed by July 9 next year.
Once the acquisition is completed, South will transition to a for-profit entity, Perdoceo said. While currently incorporated as a nonprofit, the university was listed as a for-profit by the U.S. Department of Education for the 2024-25 academic year.
During fiscal 2025, the university generated $291 million in revenue and $34 million in adjusted operating income, according to the deal announcement.
In 2023, South split from the nonprofit Education Principle Foundation. Then-Chancellor Steven Yoho said at the time that “EPF’s mission in support of the University has been fulfilled” following a years-long effort to rebuild the university’s enrollment.
EPF acquired South, together with the now-defunct Art Institutes, in 2019 from Dream Center Education Holdings, which was under severe financial distress. A court receiver appointed to oversee the liquidation of DCEH loudly criticized the deal, as it allegedly left the organization with little cash and few viable assets.
DCEH’s financial troubles stemmed back to the acquisition of South and the Art Institutes from the for-profit operator Education Management Corp. in 2017. DCEH found out later that revenue from the acquired colleges fell short of EDMC projects while costs were higher than expected, according to court documents from 2019.
But enrollment has since grown at South, and the university has posted operating surpluses in recent years.
As for Perdoceo — which owns Colorado Technical University, the American InterContinental University System and University of St. Augustine for Health Sciences — it enrolled a total of 46,830 students across its brands as of June. That is up by just under 1% from the prior year.
Last year, the company’s university banners generated robust enrollment and revenue growth while CEO Todd Nelson celebrated student retention that neared multiyear highs.
