Zovio Receives Key Approval for Transformational Sale of Ashford University to the University of Arizona



KEY POINTS
  • Zovio announced yesterday that its sale of Ashford University to the University of Arizona received approval from its key accreditor, WASC. This is expected to clear the path for an early December closing of the transaction.
  • This transaction should be a win for students, a win for the University of Arizona, and a win for Zovio.
  • This transaction ushers in a new era for Zovio as a leading education technology service company. While Ashford University has been offering a high-quality and much-needed service to so-called non-traditional students (mostly working adults), adverse regulations and hostile political interests had hampered its operations and affected Zovio’s image as a public company. We anticipate a more favorable operating environment for the new entity and a substantial reset for Zovio as a public company.
  • The school should also benefit in other ways from its association with the University of Arizona – a strong brand name and new program development opportunities being amongst the main new advantages.
  • Zovio’s other businesses have performed well this year and we believe the markets will give them increased recognition as investors’ attention can move from primary focus on the proposed transaction to a more holistic assessment of the company.

WHAT HAPPENED?

On Monday, 11/16/20, Zovio announced it had received approval from WASC, Ashford University’s accrediting entity, for the proposed sale of Ashford University to the University of Arizona. The transaction is now expected to close in early December. Subsequent to the sale, Zovio will provide services to the new entity (to be named University of Arizona Global Campus or “UAGC”) and will be reimbursed for these services and will also receive a share of the school’s revenue. This step will complete the transformation of Zovio from a for-profit school to an education technology services company with a portfolio of businesses, including university management services (to UAGC and potentially other schools), Fullstack Academy (information technology courses offered on two company-owned campuses and also in partnership with about a dozen universities and colleges), TutorMe (an Uber-type of online tutoring service that matches students with tutors), and Learn@Forbes, a suite of online business courses offered on a subscription basis.

Zovio announced yesterday that its sale of Ashford University to the University of Arizona received approval from its key accreditor, WASC. This is expected to clear the path for an early December closing of the transaction.

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