Educational Credit Management Corp. is buying 56 Everest and WyoTech campuses from Corinthian Colleges Inc. (Nasdaq: COCO) for $24 million.
ECMC plans to transition the campuses from for-profit entities to nonprofit. The schools offer curriculum on health care, business, information technology, criminal justice and legal topics.
The buyer is a nonprofit company that operates schools, and a subsidiary of ECMC Group, which is a student-loan guaranty agency. ECMC plans to reduce tuition at the schools by 20 percent for new students.
If the schools hadn't been acquired, they would have closed because of the termination of Santa Ana, California-based Corinthian's temporary operating agreement with the government. The sale needs to be approved by the U.S. Department of Education, which has financial requirements for schools.
In August, Corinthian received a civil investigative demand from the U.S. Department of Education regarding an investigation concerning allegation related to student attendance and grade record manipulation, graduate job placement rate inflation and non-Title IV funding source misrepresentation.
Corinthian, which the Nasdaq exchange is threatening to delist for not timely filing reports, is looking to sell other campuses as well. The company came to a forbearance agreement with lenders in October to delay a loan payment until Dec. 31, according to a filing with the U.S. Securities and Exchange Commission.
Many recent education-related deals have been in the e-learning space, such as Bertelsmann SE's deal for online-course provider Relias Learning in October.
For a list of troubled companies, see Mergers & Acquisitions Distressed Company Watch List.