Adtalem urged to freeze $1.5 billion deal while federal probe is pending

CRAIN’S CHICAGO BUSINESS

February 1, 2021

”Adtalem is overpaying for an inferior and potentially toxic asset, much like the ones the company has tried so hard to divest.”

(Bloomberg) — Adtalem Global Education Inc. is being urged by two investors to halt its $1.5 billion acquisition of Walden University until the U.S. Justice Department completes an investigation of the for-profit university.

Engine Capital and Hawk Ridge Partners, which collectively own a 3.9% stake in Adtalem, said in a letter to the company’s board Monday that they believe it is understating the severity of potential violations involving Walden’s nursing program, noting that four agencies are involved in the investigation.

The duo said 18 of 26 for-profit universities it found to have been investigated by the Justice Department faced sanctions or penalties, and over half are no longer in business or were sold in a fire sale. That was the case with DeVry University, which Adtalem used to own, Engine Managing Partner Arnaud Ajdler and Hawk Ridge portfolio manager David Brown wrote in the letter, which was reviewed by Bloomberg.

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