Cherry Tree Advises Capella Education Company on Acquisition of DevMountain
Capella Acquisition of DevMountain Extends Leadership Position in Job-Ready Skills Market
Innovative Coding School Latest Platform in Capella Education Company’s Strategy to Provide Most Direct Path Between Learning and Employment
Source: Capella Education Company
Capella Education Company (NASDAQ: CPLA) today announced that DevMountain, an industry-leading coding school, has become a wholly-owned subsidiary of Capella Education Company. DevMountain’s mission is to be the most accessible and impactful software coding school in the country by bringing affordability to the highest quality, hands-on education in the software coding industry. Following Capella’s recent partnership with CareerBuilder® called RightSkillSM and acquisition of Hackbright Academy, DevMountain represents a complementary platform on which to extend Capella’s leadership position in the job-ready skills market.
“Whether through innovative post-secondary degrees or job-ready skills, individuals in this economy are looking for the most direct path between learning and improved employment outcomes without any wasted time, money or effort,” said Kevin Gilligan, Capella Education Company chairman and chief executive officer. “DevMountain’s affordable, high-quality, and leading-edge programs represent a critical link in the chain of providing consumers with innovative options to advance their careers. RightSkillSM, Hackbright, and DevMountain all serve distinct parts of the employment market and together expand Capella’s portfolio of offerings in the job-ready skills space as we look to accelerate growth.”
“Partnering with Capella is the next step for us to expand our reach of changing lives by teaching modern technical skills in demand by today’s fast-paced high-tech employers,” said Cahlan Sharp, DevMountain’s co-founder and chief executive officer. “We are passionate about coding and seek to expand our reach to more students including through online delivery options, leveraging Capella’s deep online capabilities.”
The transaction closed on May 4, 2016 for a purchase price of up to $20 million, of which $15 million was paid in cash at closing with up to an additional $5 million to be paid over a three-year period pending the achievement of certain annual revenue and operating performance metrics. For 2016, we expect DevMountain to contribute up to a point of revenue growth to Capella Education Company’s results and dilution of approximately $0.10 to $0.20 per share. DevMountain will operate as a wholly-owned subsidiary of Capella and maintain its current headquarters and management team based in Provo, Utah.
“Our two recent acquisitions, DevMountain and Hackbright, are high-quality, mission-driven software technology schools serving distinct parts of the market,” said Gilligan. “DevMountain’s priorities are affordability and staying on the leading edge of technology trends. They are aimed at entry-level developer positions and their value proposition will benefit from increased online delivery. Hackbright’s priorities are closing the gender gap in the software engineering space through education, mentorship and community. We are thrilled to have both of these organizations within our company.”
Key Facts about DevMountain
- Founded in 2013 by Cahlan Sharp, chief executive officer; Tyler Richards, chief marketing officer; Colt Henrie, chief operating officer
- Headquartered in Provo, UT with additional locations in Salt Lake City, UT andDallas, TX
- Aimed at secondary technology markets to optimize affordability for students, including free housing for immersive programs
- DevMountain offers 12 week full-time immersive software coding programs in Web and iOS development for a total cost of $10,500, including free housing
- DevMountain also offers $4,500 part-time programs in Web development, iOS development and UX design
Certain information in this news release does not relate to historical financial information, including statements relating to future prospects and expectations regarding our growth, revenues, enrollment, and operating performance, and should be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The company cautions investors not to place undue reliance on any such forward-looking statements, which are based on information available at the time those statements are made or management’s good faith belief as of that time with regard to future events, and should not be read as a guarantee of future performance or results. Such statements are subject to risks and uncertainties which could cause the company’s actual results to differ materially from historical results and from results presently anticipated or projected. The company undertakes no obligation to update its forward-looking statements.
Among these risks and uncertainties are successfully integrating DevMountain’s personnel, systems and business; keeping up with advances and trends in software engineering desired by employers; any failure to materially comply with the extensive regulatory framework applicable to us; any governmental review of our business, marketing, or financial aid practices, including by any state attorneys general, the federal Consumer Financial Protection Bureau, or other state regulatory bodies; effectively managing data security risks; and managing risks associated with the overall competitive environment and general economic conditions.
Other factors that could cause our results to differ materially from those contained in its forward-looking statements include those described in the “Risk Factors” section of our most recent Annual Report on Form 10-K on file with the Securities and Exchange Commission (SEC), and any updates or developments described in our Quarterly Reports on Form 10-Q and other documents the company files with the SEC.
About Capella Education Company
Founded in 1991, Capella Education Company is a leading education provider, primarily through our wholly owned subsidiary Capella University, a regionally accredited* online university with approximately 39,000 learners as of March 31, 2016. Capella Education Company also owns Capella Learning Solutions (CLS) which provides online non-degree, high-demand, job-ready skills, training solutions and services to individuals and corporate partners; Hackbright Academy, the leading software engineering school for women with a mission to increase female representation in tech through education, mentorship and community; and Sophia, an innovative learning platform leveraging technology to support self-paced learning.
DevMountain has a reputation of being the most accessible and impactful code school in the country by bringing affordability to the highest quality, hands-on education in the software coding industry. Headquartered in Provo, UT, DevMountain has additional locations in Salt Lake City, UT and Dallas, TX.