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University Of Phoenix Owner Buys Stake In South African For-Profit College

Apollo Education Group bought an 81% stake in Milpark Education for $25.6 million. The company, whose for-profit University of Phoenix is seeing declining enrollment, has been expanding in international markets since 2007.

Posted on May 20, 2014, at 1:57 p.m. ET

Apollo Education Group, which owns the University of Phoenix, is moving into the South African market.

The company announced this morning that its Apollo Global unit acquired an 81% stake in South Africa's Milpark Education for $25.6 million. It is Apollo's first foray into Africa, and the latest in a set of international acquisitions that began in 2007 and includes the UK, Australia, India, Chile and Mexico.

Revenue for Apollo's international operations is just a tiny fraction of what the University of Phoenix generates — $275 million in 2013, compared to $3.3 billion — but the Phoenix brand is facing intense pressure lately. As the largest for-profit college in the country, it has become one of the faces of the Obama administration's efforts to brand for-profit colleges as relatively pricy degree factories with high levels of student debt. Since 2008, it has seen declining enrollments and weathered allegations of recruiting and enrollment abuses.

Not unlike the University of Phoenix, the South African Milpark Education is targeted to adult learners, offering hybrid programs that mix physical campus education with online offerings. The relatively small company, with roughly 15,000 students, will serve as an entry point into the African market, said Ryan Rauzon, a representative for Apollo.

Apollo is not the only for-profit college operator that sees promise in the international market, where access to traditional degrees at non-profit and brick-and-mortar institutions is more limited. Laureate Education, an under-the-radar-private company in the United States, is the biggest player in the international market, with more than 800,000 students in 30 different countries. And earlier this year, massively open online course provider Coursera hired a new CEO, Richard Levin, in hopes of raising their profile in China and elsewhere.