University of Idaho Terminates Acquisition of University of Phoenix for $17.24 Million
In a surprising turn of events, the University of Idaho has ended its plans to acquire the University of Phoenix, with the for-profit institution agreeing to pay $17.24 million in termination fees. This decision comes more than two years after the acquisition was first announced in May 2023, with an estimated value of $685 million.
The proposal had faced significant scrutiny from Idaho lawmakers and others due to concerns over the risks associated with acquiring a large for-profit university marked by regulatory issues and allegations of federal law violations. The planned acquisition would have established a new nonprofit organization affiliated with Idaho to manage the University of Phoenix, which currently serves over 85,000 online students. Idaho officials had anticipated this move would enhance their online educational offerings and revenue streams.
Scott Green, president of the University of Idaho, expressed appreciation for the discussions with Phoenix but cited the deal as "cost prohibitive" and potentially distracting from other endeavors. The $17.24 million payout will cover Idaho’s due diligence costs, including a previous $5 million payment from Phoenix related to the deal’s extension.
The abandonment of the acquisition was largely expected, particularly as Idaho lawmakers failed to approve the deal during a crucial spring vote. Meanwhile, the University of Phoenix plans to continue operating independently and is exploring options for an initial public offering, potentially making it a publicly traded entity.
This acquisition saga reflects broader patterns in the realm of educational mergers, particularly involving for-profit colleges, with ongoing debates regarding their integration into public university systems. The Idaho state board of education is set to meet Thursday to formally document the termination of the acquisition discussions.
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