Perdoceo Education agreed to acquire all membership interests in South University Savannah, LLC, with an initial cash payment of $150 million and additional deferred and earn-out consideration. Investors face a transaction funded from available cash, subject to educational approvals, other closing conditions and a possible termination fee of up to $20 million.

Key Highlights

  • South University recorded approximately $291 million in unaudited Revenue and $34 million in adjusted Operating Income for 2025.
  • Perdoceo may pay $18 million in deferred consideration over 24 months after closing.
  • Earn-out payments could reach $56 million and depend on specified EBITDA thresholds for 2027, 2028 and 2029.

Perdoceo Education Corporation (NASDAQ: PRDO) agreed to acquire 100% of the membership interests in South University Savannah, LLC for an initial cash payment of $150 million. The transaction is expected to close as early as April 2027, subject to required consents, regulatory clearances and other conditions. Perdoceo Education expects to fund the purchase price, deferred consideration and any earn-out payments entirely from available cash balances.

South University’s Operating Profile

Approximately 10,500 undergraduate and graduate students were registered for courses during 2025. After closing, the acquired institution will operate on a for-profit basis.

Deferred and Contingent Consideration

The initial cash payment is subject to adjustments tied to cash, net Working Capital and specified debt-like items based on South University’s Balance Sheet at the beginning of April 2027. Perdoceo is expected to pay another $18 million in deferred cash consideration through installments over 24 months after closing. The agreement also provides for earn-out cash payments of up to $56 million if specified milestones are achieved.

Approval Conditions and Termination

The transaction requires certain third-party consents, including approvals from applicable educational regulatory agencies. South University must conduct its Business in the ordinary course and not solicit proposals for alternative transactions before closing. The agreement may be terminated if the transaction has not closed by July 9, 2027. In specified circumstances, termination would require Perdoceo to pay the seller a fee of up to $20 million. The agreement also provides for buyer-side representations and warranties insurance for the company’s primary recourse concerning damages from breaches of the seller’s representations and warranties. The policy carries customary conditions, exclusions and deductibles.