Perdoceo to Acquire South University in Cash-Funded Health Sciences Push

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3▲1 ▼0Impact / 5
Summary · why it matters

Perdoceo Education Corp. announced on September 14 a definitive agreement to acquire South University, a Savannah, Georgia-based institution founded in 1899 that adds eleven campuses and online clinical programs in nursing, pharmacy, and physician assistant studies. The deal is funded entirely from cash on hand, backed by $734.8 million in cash and cash equivalents as of June 30, 2026, and includes $18 million in deferred consideration payable over 24 months plus up to $56 million in performance-based earn-outs tied to EBITDA thresholds across fiscal years 2027, 2028, and 2029. The transaction is expected to close as early as April 2027, with a drop-dead termination date of July 9, 2027, and management expects it to be immediately accretive to adjusted operating income. The announcement followed double-digit earnings growth and a 13.3% dividend hike to $0.17 per share, while the existing University of St. Augustine for Health Sciences segment posted second-quarter revenue growth of 10.2% and swung to $3.6 million in operating income from a $1.7 million loss a year earlier. Colorado Technical University, the largest revenue contributor at $115.5 million in the second quarter, saw operating income slip 5.1% on elevated legal expenses, and the American InterContinental University System segment recorded enrollment down 1.0% and revenue down 1.8%.

Impact on assets 2

Consumer Discretionary▲ · 2 stocks
Perdoceo Education Corp
PRDO
▲ PositiveCapitalrelevance

Perdoceo announced a cash-funded acquisition of South University expected to be immediately accretive to adjusted operating income, alongside a 13.3% dividend hike.

Off-coverage companies 5

American InterContinental University SystemPrivate▼ Negative
Demandrelevance

American InterContinental University System segment recorded enrollment down 1.0% and revenue down 1.8%.

Colorado Technical UniversityPrivate▼ Negative
Capitalrelevance

Colorado Technical University, the largest revenue contributor, saw operating income slip 5.1% on elevated legal expenses.

University of St. Augustine for Health SciencesPrivate▲ Positive
Demandrelevance

University of St. Augustine for Health Sciences posted Q2 revenue growth of 10.2% and swung to $3.6 million operating income from a year-earlier loss.

South University - MemberPrivate± Mixed
relevance

South University SavannahPrivate± Mixed
relevance

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