Perdoceo Education Announces Acquisition of South University Savannah

What Happened

• On September 14, 2026, Perdoceo Education Corporation (PRDO) announced it entered a Membership Interest Purchase Agreement to acquire 100% of South University Savannah, LLC from South University – Member, Inc. The initial cash payment at closing is $150 million (subject to customary adjustments), plus $18 million in deferred cash paid over 24 months and up to $56 million in earn-out cash tied to EBITDA thresholds for fiscal years 2027–2029. Perdoceo expects to fund the purchase price, deferred consideration and any earn-outs from its available cash balances and aims to close as early as April 2027, subject to regulatory and other closing conditions.
• South University served roughly 10,500 students in 2025, reported unaudited revenues of about $291 million and adjusted operating income of approximately $34 million for the year ended December 31, 2025. South is institutionally accredited by SACSCOC through 2034 and will operate as a for‑profit institution after closing.

Key Details

• Agreement date: September 14, 2026; target close: as early as April 2027; drop-dead termination date: July 9, 2027.
• Consideration: $150M initial cash (adjustable), $18M deferred over 24 months, up to $56M earn-outs tied to 2027–2029 EBITDA.
• Financials: South’s 2025 unaudited revenue ≈ $291M; adjusted operating income ≈ $34M (non‑GAAP).
• Deal protections/risks: buyer-side representations & warranties insurance will be obtained (survives at least three years); Company’s primary recourse for seller breaches is through that insurance; termination fee up to $20M payable to seller in specified circumstances.

Why It Matters

• This acquisition would add a multi-campus, accredited higher‑education provider with meaningful 2025 revenue and operating income to Perdoceo’s portfolio, potentially expanding its campus footprint and program mix.
• The purchase requires regulatory and third‑party consents (including educational approvals and HSR timing), so closing is contingent on those approvals.
• The upfront cash commitment ($150M plus $18M deferred and potential earn-outs) will be paid from Perdoceo’s cash balances, affecting near‑term liquidity use; the buyer‑side R&W insurance limits Perdoceo’s direct post‑closing indemnity exposure.
• Perdoceo also issued a press release reaffirming its full‑year adjusted operating income outlook of $258M–$263M.