DeVry Buys Entrée to Health Care Ed

DeVry Inc. announced recently the purchase of closely-held U.S. Education Corp. for $290 million to expand its presence in health care education. DeVry, based in Oakbrook Terrace, said the acquisition will be neutral to a 1¢ in 2009 and between 7¢ and 10¢ per share accretive in 2010. It will finance the deal, projected to close soon, with a combination of cash and debt, DeVry’s CEO told Reuters in an interview. Integration planning has started and the company expects to seek Dept. of Education approval now that it has announced the deal. No jobs will be cut, he said. For 2 years, DeVry's been talking about buying a school specializing in qualifications for jobs that support doctors, dentists or nurses to expand its offerings in health care and in degrees and certificates taking two years or less. Medical education, including degrees for doctors, veterinarians and nurses, accounts for 14.7% of its revenue. The CEO said with the close of the deal, they have one of the largest platforms of anybody in the biggest need area in the world of education. U.S. Education, headquartered in Mission Viejo, CA, has two schools, Apollo College (not affiliated with Apollo Group Inc. and Western Career College, about 8,700 students and 17 campuses. The price tag equates to a little over 11x earnings before interest, tax, depreciation and amortization, a measure of cash flow. In 2008, U.S. Education's estimated operating income grew to $19.5 million from $11.8 M, while its estimated revenue grew 24% to $144M in the same period. DeVry plans to expand U.S. Education, which will retain its brand, by opening at least one new campus a year starting next year and by adding online offerings, the CEO said. The company also sees more health care education acquisitions in its future.