Post-secondary education has seen a shift over the past few years. Once a fading sector, it has recently gained the attention of private equity firms across the globe. Our firm, however, has long seen the potential in this sector and has been investing heavily in it.
Understanding Post-Secondary Education
Post-secondary education refers to any training or instruction an individual receives after high school that focuses on specific trades in various industries. Unlike primary and secondary school, which are mandatory for children under the age of 18, post-secondary education is optional and includes universities and colleges, as well as trade and vocational schools. Post-secondary education typically culminates with a diploma, certificate, degree, or advanced degree. Many people see post-secondary education as a ticket to economic security since it often leads to more job opportunities.
Historically, high school graduates have been pushed to attend a four-year institution. However, the economic impact of the COVID-19 pandemic has proven that skilled careers continue to be relevant in the United States. According to private equity investor Mark Hauser, the most prominent example has been the increased demand for registered nurses throughout the world over the past two years.
While post-secondary education has gone through a tough time since the pandemic started in 2020 – with a lot of sacrifices and painful choices made to strengthen institutions – now is the time to boldly move forward. According to Salesforce.org: “For education institutions, nonprofits, and for-profit companies alike, 2022 will be about bold actions and investments that will result in long-term impact and success in the era ahead.” Hauser Private Equity has already contributed to this trend.
Hauser Private Equity Invests in Post-Secondary Sector
In 2019, Hauser Private Equity partnered with Renovus Capital Partners – a Philadelphia-based private equity firm that focuses on companies in the education, healthcare services, technology services, and professional services sectors – to co-invest in Rasmussen College, today known as Rasmussen University. In 2021, through the same partnership, HPE acquired EducationDynamics, a market leader in higher education marketing, enrollment management, and student success coaching.
Investment in Rasmussen University
Rasmussen University offers degree programs in nursing, health sciences, business, technology, design, education, and justice studies. It provides both traditional and competency-based programs online and through 24 campuses across six states. It is considered one of the largest providers of pre-licensure nursing programs in the United States and is regionally accredited by the Higher Learning Commission (HLC), an institutional accreditation agency recognized by the U.S. Department of Education (DOE).
The university specializes in offering career-focused programs that “provide higher education options for working adults with goals to go further in the ever-changing job landscape.” Its mission is to “empower students, faculty, and staff to exceed the expectations of society through academic excellence, community enrichment, and service to the public good.”
Through Hauser Private Equity’s unique partnership with Renovus Capital Partners, Hauser Private Equity has expanded Rasmussen University’s best-in-class nursing and high-end healthcare programs and improved its operating results through an emphasis on affordability and student outcomes. They thrive on connecting graduates with the demanding employment market.
Because Rasmussen University was able to clearly define and effectively execute target strategies, American Public Education, Inc. quickly recognized its long-term potential. American Public Education is a leading provider of career-focused higher education and training that provides pathways to employment and career advancement. In 2021, the company acquired Rasmussen University and soon benefited from the post-secondary institution’s potential.
Rasmussen, which has continued to operate as a separately accredited institution, had anticipated revenue of $275 million in 2021. American Public Education’s investment is expected to generate cost savings in excess of $5 million in the first 12 months post-close and at least $10 million in the second and third years after closing.
The sale of Rasmussen University nearly doubled American Public Education’s revenue to approximately $600 million. Furthermore, the acquisition significantly diversified the company’s revenue stream because it is now serving students from a wider variety of backgrounds. Recent reports indicate that new demographics include approximately one-third military and veteran students, one-third nursing students, and one-third online adult learners. Nearly 8,500 nursing students joined the existing 2,300 nursing students, rapidly expanding the institution’s nursing education program. Overall, the addition of Rasmussen University has expanded American Public Education so that it now serves more than 110,000 students and is expected to generate approximately $90 million in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) before synergies.
In line with HPE’s strategy, Mark Hauser recruited Tom Slagle to remain in a leadership position, serving as the company’s chief executive officer (CEO), a position he has held since 2010.
American Public Education promises to provide students who are enrolled in higher education a return on their investment, and the scale and diversification created by the acquisition of Rasmussen University will ensure this promise becomes a reality.
Investment in EducationDynamics
Shortly after the investment in Rasmussen, Hauser Private Equity and Renovus Capital Partners acquired EducationDynamics, an industry leader in helping colleges and universities achieve enrollment goals by offering a full suite of marketing and enrollment growth services and solutions. The company is a trusted partner to more than 500 institutions of higher education across the country, delivering inquiry generation and agency-of-record marketing such as paid digital, organic search and awareness, enrollment management, retention, and technology solutions.
This recent acquisition by Mark Hauser’s Hauser Private Equity and Renovus Capital Partners focuses on improving operations and investing in services and capabilities dedicated to strengthening the companies’ partnership with colleges and universities, as well as furthering their mission of improving student enrollment and retention.
Investing in the Future
Education is essential to personal well-being and long-term economic prosperity and is the basis for innovation and progress across various industries. As the current nursing shortage demonstrates, our country continues to rely on competency-based education. Today’s post-secondary institutions, however, face countless challenges, including increased accountability, affordability, adaptability, and access. Hauser Private Equity and investment professional Mark Hauser actively seek opportunities to innovate and lead in ways that better serve educational institutions and create sustainable competitive advantages.