2U, Inc. to Acquire GetSmarter
LANHAM, Md., USA and CAPE TOWN, South Africa – May 2, 2017 – 2U, Inc. (NASDAQ: TWOU), a leader in partnering with colleges and universities to deliver the world's best digital education, announced today, that it has entered into an agreement to acquire GetSmarter (incorporated as Get Educated International Proprietary Limited), a leader in collaborating with universities to offer premium online short courses to working professionals. Both 2U and GetSmarter focus on delivering high-quality, high-touch digital higher education from world class colleges and universities to unlock a student’s full potential.
GetSmarter powers engaging online short courses in partnership with some of the world’s most renowned higher education institutions, including the University of Cambridge, Harvard University’s strategic online learning initiative, HarvardX, Massachusetts Institute of Technology (MIT), and Africa’s top three universities, University of Cape Town, University of the Witwatersrand and University of Stellenbosch Business School. It is a high growth business that has served more than 50,000 students since inception with course completion rates that average 88%. GetSmarter’s portfolio includes over 70 short courses offered with its university partners, including Business Sustainability Management from the University of Cambridge’s Institute for Sustainability Leadership, Global Health Delivery from HarvardX, and Healthcare Informatics from the University of Chicago. GetSmarter operates under a revenue share model with its university clients.
2U will acquire GetSmarter in all-cash transaction for approximately $103 million, subject to certain purchase price adjustments, and an earn-out payment of up to $20 million in cash, subject to achievement of certain financial milestones in calendar years 2017 and 2018. Subject to various closing conditions, the acquisition is expected to close during the third quarter of 2017. The acquisition is expected to strengthen 2U’s position in the approximately $1.9 trillion global higher education market which is expected to grow approximately 8% in 2017, while accelerating two of the company’s key strategic growth initiatives – expanding internationally and into non-degree alternatives.
“GetSmarter’s pursuit of quality in online education, demonstrated by a uniquely high student course completion rate that averages 88% is truly remarkable and mirrors 2U’s mission to offer the world’s best digital education as defined by our partner students’ outcomes and satisfaction.” said Christopher “Chip” Paucek, CEO and co-founder of 2U. “With GetSmarter, 2U expects to strengthen its position as a leader in digital education. We also expect to accelerate our growth, extend our global footprint and provide a broader suite of services by matching up more students to the right programs at the right time as they further their professional and personal development.”
“In 2U we have found a partner who makes us stronger. They bring deep experience and access to capital that allows us to pursue stellar growth and stand out student outcomes at scale.” said Sam Paddock, CEO and co-founder of GetSmarter. “We look forward to better serving our University partners and their students across the globe.”
2U intends to continue to grow its core business of powering online domestic graduate degree programs, a market that continues to provide strong and attractive growth opportunities. Following the closing of the acquisition, GetSmarter will be an independently operating, wholly-owned subsidiary of 2U, based in Cape Town, South Africa. GetSmarter will continue to be operated by its current management team, including its founders, Sam Paddock and Rob Paddock, with GetSmarter co-Founder & CEO, Sam Paddock, remaining as its CEO and reporting to Chip Paucek.
About 2U, Inc. (NASDAQ:TWOU)
2U partners with great colleges and universities to build what we believe is the world’s best digital education. Our platform provides a comprehensive fusion of technology, services and data architecture to transform high-quality and rigorous campus-based universities into the best digital versions of themselves. 2U's No Back Row® approach allows qualified students and working professionals around the world to experience a first-rate university education and successful outcomes. To learn more, visit 2U.com.
