The owners of Capella University plan to take the company public. It would become the first online-only institution to be listed on a stock exchange.
The sale of stock in Capella Education Company would be the first initial public offering in the higher-education sector since the June 2005 public offering by the Lincoln Educational Services Corporation, a company whose colleges focus on two-year programs in automotive technology and allied health.
Capella is a 13-year-old institution founded as the Graduate School of America. Renamed Capella University in 1999, it enrolls more than 16,000 students, 84 percent of whom are pursuing master’s or doctoral degrees. The university offers 13 degree programs in such fields as business, education, information technology, and psychology.
Capella Education, based in Minneapolis, will be a relatively small player among publicly traded higher-education companies. It reported annual revenue in 2005 of about $149-million and revenue for the first nine months of 2006 at just under $130-million. Lincoln’s revenue for the last 12 months was about $310-million. Strayer Education, a company that, like Capella, focuses more on serving students seeking bachelor’s and advanced degrees, had revenue in the range of $240-million.
Capella Education hopes to raise as much as $89-million in its initial offering, based on an expected maximum stock price of $17.50 to $19.50 per share. All proceeds will be used to pay the company’s original investors, including its chairman and chief executive officer, Stephen G. Shank, who founded the institution.
Company executives expect to offer the stock later this month, at the completion of "roadshow" meetings with potential investors. Capella Education will trade on the Nasdaq market under the ticker symbol CPLA.
By Goldie Blumenstyk
This article was taken from the Chronicle of Higher Education