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Capella and Strayer complete $1.2 billion merger, take new name as Strategic Education

August 1, 2018

Share trading in Capella Education Co. ended Wednesday as the Minneapolis online education company formally merged with Strayer Education Inc. and the two firms took a new name, Strategic Education Inc.

The deal, which valued Capella at $1.2 billion, or $104 a share, brought together two of the countrys largest for-profit education providers with different histories and few overlapping operations.

Strayer, a Virginia-based company with roots that stretch back 125 years, is chiefly known for business programs and mainly serves undergraduate students. Capella started in 1993 and provides graduate-level professional degrees that are mainly delivered online through Capella University.

The two companies also jointly announced second-quarter results, with both showing gains in enrollment and adjusted earnings. Both reported slight declines in revenue.

Strayer said its enrollment rose 8 percent to 46,868 in the April-to-June period, while Capella University reported an enrollment gain of .5 percent to 37,786. New student enrollment was up 7 percent at Strayer and nearly 15 percent at Capella.

Karl McDonnell, Strayers chief executive, will lead the combined company and was in Minneapolis Wednesday to meet with Capella employees and students of its in-person classes.

McDonnell said the latest performance of the two firms demonstrates our organizations ability to execute, and positions us for continued future success.

Strategic Education will remain traded under Strayers former stock symbol, STRA. Shares were up 5 percent in early trading Wednesday.

Evan Ramstad 612-673-4241

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