Perdoceo Education Signs Definitive Agreement To Acquire University of St. Augustine For Health Sciences, Expects To Pay ~$142M-$144M In Cash At Closing To Acquire 100% Ownership Of USAHS; Remains On Track To Achieve Its FY Adj. Operating Income Outlook For $175M-$190M

Transaction Details

• Perdoceo expects to pay approximately $142 million to $144 million in cash at closing to acquire 100% ownership of USAHS. The actual cash paid will depend on adjustments for cash, debt and working capital based on the final closing balance sheet.
• Pursuant to the merger agreement, Perdoceo has purchased a buyer-side representation and warranty insurance policy, which will serve as the primary source of protection against certain risks associated with representations and warranties made by the seller and pre-closing tax liabilities. The representation and warranty insurance policy is subject to customary conditions, exclusions and deductibles and will survive for at least three years from the closing.
• The boards of directors of both parties to the merger, the USAHS board of directors, and the USAHS stockholders holding 100% of the voting power over USAHS' parent's outstanding common stock, each have unanimously approved the acquisition, and no other stockholder or board approval is required to complete the acquisition.
• The merger agreement may be terminated in certain specified, limited circumstances. Upon such termination Perdoceo will be required to pay the seller a termination fee of either $4 million, $10 million or $20 million, depending on the circumstances.
• The acquisition is not subject to a financing condition. Perdoceo plans to use cash on hand for the purchase.
• The acquisition is subject to regulatory clearances, including receipt of required antitrust clearance and approval from WASC, receipt of a preacquisition review response from the US Department of Education, and other closing conditions specified in the merger agreement. The transaction is expected to close in December 2024.
• For the year ended December 31, 2023, USAHS had revenues of approximately $170 million, operating income of approximately $35 million and served approximately 4,500 graduate and post-graduate students across multiple health sciences disciplines.
• Perdoceo expects the transaction to be accretive to the Company's adjusted operating income immediately beginning in 2025 and the transaction to provide further growth in adjusted operating income in 2026.
• The acquisition of USAHS is consistent with Perdoceo's balanced capital allocation strategy of acquiring quality academic institutions that are accretive acquisitions while also returning capital to shareholders via dividends and share buybacks.

Affirming Outlook for Fiscal Year 2024

Perdoceo remains on track to achieve its full year adjusted operating income outlook for $175 million to $190 million, as provided in the Company's previous quarterly earnings release, subject to the assumptions and factors set forth therein.