Strategic Education, Inc.

Strategic Education, Inc.
Public
Traded as
Industry Education
Headquarters Herndon, Virginia, United States
Key people
  • Robert S. Silberman
  • (Executive Chairman)
  • Karl McDonnell
  • (CEO)
  • Daniel W. Jackson
  • (CFO)
Services Online education
Revenue Increase US$ 454.85 million (2017)
Decrease US$ 52.21 million (2017)
Decrease US$ 20.61 million (2017)
Total assets Increase US$ 321.28 million (2017)
Total equity Increase US$ 209.20 million (2017)
Number of employees
 1,389 (2017)
Website StrategicEducation.com
Footnotes / references
[1]
Entrance to Capella Education Corporation headquarters at 225 South Sixth in Minneapolis

Strategic Education Inc. is an education services holding company. The company owns for-profit, online Capella University and Strayer University, as well as coding schools DevMountain, Generation Code, Hackbright Academy, and The New York Code + Design Academy.[2]

History

In August 2018, Capella Education Company merged with Strayer Education, Inc., in a $1.9 billion deal.[3] The two publicly-traded parent companies combined corporate functions but the universities they operate remain separate institutions.[4] The new parent company is called Strategic Education, Inc.[5]

Strayer shareholders control 52% of Strategic Education, while Capella shareholders control the other 48%.[6]

Strayer University and Capella University collectively serve about 80,000 students.[7]

Capella Education Company

The Capella Education Company was founded in 1991 by Stephen Shank, former CEO of Tonka Corporation. In 1993, it opened The Graduate School of America (TGSA). In 1999, the company and university were renamed to Capella Education Company and University. In 2003, the company was named to Inc. magazine's Inc. 500 Hall of Fame after being named one of America's 500 Fastest-Growing Private Companies for the fifth year in a row. Prior to going public the company raised more than $67 million from private investors, including Maveron.

On January 8, 2005, Capella Education Co. said it had two new investors following deals totaling more than $60 million.[8] The company announced its intentions to go public with an initial public offering in April 2005. It reported 2005 earnings of $10.2 million on sales of nearly $150 million. On November 9, 2006, it completed a public offering that raised $80 million.

In March 2008, Capella Education Co., longtime occupant the 225 South Sixth skyscraper in downtown Minneapolis, signed a new lease that changed the name of the building to Capella Tower. The expanded facility housed all of the company's 1,150 downtown Minneapolis employees Capella; as the online school does not have classrooms, the space houses administrative staff and faculty. The name change took place on March 2009.[9]

In July 2011, Capella Education Company acquired the UK based Resource Development International Ltd to gain access to the fast-growing international higher education market.[10][11] In August 2015, RDI received approval in the UK to become the newly formed Arden University in 2015.[12][13] The following year Capella sold Arden University and its subsidiaries to Global University Systems.[14]

In April 2016, Capella Education Company acquired the software engineering school for women, Hackbright Academy and coding bootcamp, DevMountain.[15]

Strayer Education Inc.

Strayer Education Inc. is a publicly traded corporation, established as a holding company for the college and other assets in 1996. The company was created to take what was then Strayer College public and raise capital for expansion. Its corporate headquarters are in Herndon, Virginia.[16][17] Karl McDonnell has been CEO since May 2013.[18][19] McDonnell joined Strayer in July 2006, and was previously president and COO. Previous CEO Robert S. Silberman, who took the position in March 2001, was named executive chairman of the board.[20]

Between 2001 and 2005, the company's main owners were New Mountain Capital and a private equity unit of Deutsche Bank, DB Capital.[21]

In 2009, Robert S. Silberman had total compensation of $41.5 million, a large portion of which was restricted stock that does not vest until 2019.[21] to around 9,000 by 1997.[22][23][24] This was the highest compensation in the for-profit education industry and led in 2010 to the Washington Post naming him the most highly compensated CEO in the Washington, D.C., area.[21][25] His annual compensation in 2010 was $1.5 million.[21] On August 9, 2012, the syndicated comic strip Doonesbury described Strayer's unusually high executive compensation as part of a series of satirical strips on for-profit education.[26][27][28][21]

Strayer stock has dropped more than 60% since its peak in 2010.[29] For the second calendar quarter of 2012, the company reported net income of $21.2 million from total revenue of $146.3 million. Revenue was 11 percent lower and income 28 percent lower than the same quarter of the previous year.[30]

References

  1. ↑ "US SEC: Form 10-K Strayer Education, Inc". U.S. Securities and Exchange Commission. Retrieved March 7, 2018.
  2. ↑ "Strayer Education, Inc. Closes Merger with Capella Education Company".
  3. ↑ Ashley Smith. "Strayer and Capella Merger Finalized".
  4. ↑ Andy Medici. "Pencils down: Strayer completes 'merger of equals' with Minneapolis education firm".
  5. ↑ "Strayer Education, Inc. Closes Merger with Capella Education Company". Market Watch.
  6. ↑ Gemma Cottrell. "Strayer Education (NASDAQ:STRA) Downgraded by Zacks Investment Research".
  7. ↑ Emma Whitford. "Strayer and Capella Merger Approved".
  8. ↑ "CAPELLA INVESTORS BUY $60M WORTH OF SHARES".
  9. ↑ Sam Black, Capella lease to rename 225 South Sixth, Minneapolis / St. Paul Business Journal, March 20, 2008.
  10. ↑ Wall Street Journal Online Edition http://online.wsj.com/article/BT-CO-20110715-705702.html
  11. ↑ Capella Education Company News Release "Archived copy". Archived from the original on 2011-07-21. Retrieved 2011-07-19.
  12. ↑ MarketWatch.com RDI, Subsidiary of Capella Education Company, Approved to Operate as Arden University in the United Kingdom
  13. ↑ Times Higher News, For-profit RDI granted university status
  14. ↑ Peters, Kai; Smith, Richard R.; Thomas, Howard (eds.) (2018). Rethinking the Business Models of Business Schools, p. 161. Emerald Group Publishing. ISBN 1787548740
  15. ↑ "Hackbright Academy Joins Capella Education Company to Further Goal of Closing the Gender Gap in Software Engineering".
  16. ↑ "History". Strayer Education. Strayer Education, Inc. Retrieved 30 December 2011.
  17. ↑ "Strayer Education Inc". Bloomberg Businessweek. 21 February 2012. Archived from the original on 30 July 2012. Retrieved 26 March 2012.
  18. ↑ Strayer Education Inc. Bloomberg, May 10, 2016.
  19. ↑ Robert S. Silberman Bloomberg, May 10, 2016.
  20. ↑ Strayer Education Inc. Wall Street Journal, May 10, 2016.
  21. 1 2 3 4 5 "For Profit Higher Education: The Failure to Safeguard the Federal Investment and Ensure Student Success". U.S. Senate Committee on Health, Education, Labor, and Pensions. pp. 713–727. Archived from the original (PDF) on 29 July 2012. Retrieved 9 August 2012.
  22. ↑ Abrahms, Doug (1 September 1997). "Schools, pupils learn education pays off quickly". The Washington Times. p. D12.
  23. ↑ "Strayer Education Inc., Form DEF 14A (Proxy Statement (definitive))" (PDF). files.shareholder.com. EDGAROnline. 29 March 2011. Retrieved 12 March 2012.
  24. ↑ Tamar Lewin (July 29, 2012). "Senate Committee Report on For-Profit Colleges Condemns Costs and Practices". New York Times.
  25. ↑ Beyers, Dan (2010). "Executive Compensation". The Washington Post. Retrieved 30 December 2011.
  26. ↑ Holdaway, Xarissa (August 9, 2012). "Deceit and Fraud: Totally Hilarious". Chronicle of Higher Education.
  27. ↑ Fain, Paul (August 10, 2012). "Discounts at For-Profits?". Inside Higher Ed.
  28. ↑ Trudeau, Garry (9 August 2012). "Doonesbury". Retrieved 9 August 2012.
  29. ↑ "STRA Interactive Stock Chart". YAHOO! Finance. YAHOO!. Retrieved 12 May 2017.
  30. ↑ "Strayer profit tumbles on enrollment declines". Ventura County Star. Associated Press. July 26, 2012.
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