Adtalem Global Education Inc. (NYSE: ATGE), a leading healthcare educator, today announced its intent to enter into an accelerated share repurchase (ASR) agreement to repurchase an aggregate of $150 million of Adtalem’s common stock, which will be funded with existing cash. In addition, the company intends to deploy approximately $770 million of the approximately $820 million in net proceeds from the pending divestiture of the financial services segment to pay down debt. The financial services divestiture is expected to close in the third quarter of fiscal 2022 by March 31, 2022.
In addition to authorizing management to pursue the $150 million ASR program, the Adtalem Board of Directors has authorized open market share repurchases of up to $300 million of the company’s common stock over the next 36 months, which would be funded by existing cash and future free cash flow. Any open market purchases will be at such times and in amounts as the company has approved in accordance with applicable rules and regulations.
“Our planned use of proceeds from the divestiture demonstrates and honors our commitment to strengthening our balance sheet and reducing the significant gap between the intrinsic value of our assets and our equity market capitalization,” said Steve Beard, president and CEO of Adtalem Global Education. “These two steps combined will create substantial value for our owners and strengthen the financial metrics for our remaining debt holders. We are confident in the long-term opportunity for Adtalem and believe that the sharpened focus of our portfolio greatly enhances our ability to address – at scale – the rapidly growing and unmet demand for healthcare professionals in the US.”
The company anticipates annualized interest expense savings of approximately $40 million as a result of paying down $770 million in debt and intends to pay down debt approximately 30 days after completing the financial services divestiture. Morgan Stanley will be the structuring adviser to Adtalem on the ASR agreement.
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