College graduates, Domestic, For-Profit, Investors, Required - Written by on Thursday, August 4, 2011 15:22 - 0 Comments

DeVry Buys Medical School, American University of the Carribean

photo credit: flickr user Lower Columbia College

by Elbert Chu


DeVry Inc. (NYSE: DV) announced it paid $235M in cash for America University of the Carribean, their second medical school after Ross University School of Medicine, also in the islands. The stock was trading pretty much flat heading into the close.

AUC enrolls 1,000 medical students , 90% which are Americans, compared to Ross’s 4,800 students.  UBS analyst Ariel Sokol calls the AUC 0.8% default rate in 2008 “minuscule.”

Sokol thinks the purchase is a smart acquisition compared to many of the other for-profit companies who are using extra cash to repurchase stock. Besides strengthening DeVry’s position in healthcare education, Forbes reports the medical students are helping buffer the weak enrollment numbers plaguing the industry in the wake of new regulations:

In the U.S., DeVry owns a nursing school chain, Chamberlain, and Carrington, which offers physician’s assistant courses and other healthcare degrees.

The company’s medical and healthcare division makes up 26.5 percent of its revenue, according to FactSet. Chamberlain’s enrollments growth has helped DeVry weather the steep decline in student enrollments that has hit the for-profit education sector since late last year.

The Oakbrook Terrace, IL-based DeVry expects the acquisition to add $.05 a share for year ending June 2012.

Full article at Forbes.

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