American Public Education, Inc. · NASDAQ:APEI
American Public Education — Merger or Acquisition (October 2020)
19 slides from American Public Education's merger presentation, Oct 29, 2020
Slide 1: Transformational Acquisition of Rasmussen University
Transformational Acquisition of Rasmussen University Doubles APEI Revenue, #1 Educator of Pre-Licensure Nurses (ADN/RN and PN/LPN) PRESENTED BY Angela Selden President and CEO Richard Sunderland, CPA Executive VP and CFO Rasmussen University Acquisition Steve Somers, CFA October 2020 Senior VP and C
Slide 2: Safe Harbor Statement
Safe Harbor Statement Statements made in this presentation regarding American Public Education, Inc. (“APEI”), or its subsidiaries, that are not historical facts are forward-looking statements based on current expectations, assumptions, estimates and projections about APEI and the industry. Forward-
Slide 3: Transformative Deal Positions APEI for Future Growth
TRANSFORMATIVE DEAL POSITIONS APEI FOR FUTURE GROWTH Acquisition of Rasmussen University expected to double APEI revenue to $600MM in 2021* APEI Will Be Establishes APEI APEI and #1 Educator of As a Scale Rasmussen have Pre-Licensure Platform w/ Strong Alignment Nurses (ADN/RN New Capabilities aroun
Slide 4: About the Transaction
ABOUT THE TRANSACTION APEI acquires 100% ownership of Rasmussen University Transaction Purchase price is $329 million Structure - consisting of $300 million in cash plus $29 million in preferred shares APEI may substitute cash for preferred shares at the time of closing $175 million of commi
Slide 5: #1 Educator of Pre-Licensure Nurses in a Growing Market
#1 EDUCATOR OF PRE-LICENSURE NURSES (ADN/PN) IN A GROWING MARKET Rasmussen‘s ADN (RN) is its largest degree program and has shown strong historical growth Critical Need: Nursing RN’s Addressing the Need RN is a Top Growing Job Through 2029 10,000+ 2100 1600 2100 2100 1700 8200 6900 6200 5300 4300 20
Slide 6: Combined ~$165 Million in Nursing Revenue
COMBINED ~$165 MILLION IN NURSING REVENUE Enhances competitive market position across several markets with large projected nursing shortages Rasmussen will add 24 Campuses Across Seven States and Online, Including Blended Learning and Competency-Based Education (CBE) + = Powerhouse Nursing Platform
Slide 7: Opportunities in Non-Nursing
OPPORTUNITIES IN NON-NURSING CBE and Differentiated Pricing Address Changing Market Demands, Supports HEROI™ Rasmussen University’s • Campuses provides platform for other clinical-based health- Total Enrollment by Program: 18,000+ Learners (as of 4Q2020) sciences programs • Generous transfer policie
Slide 8: A Strong Financial Record for Growth & Profitability
A STRONG FINANCIAL RECORD FOR GROWTH & PROFITABILITY Rasmussen financials driven largely by market demand for nursing and focus on operating efficiency Total Enrollment Total Revenues Adjusted EBITDA In millions In millions $300 $45 18% 20,000 16% 18,197 $256 $40 16% 17,196 $250 $242 16,603 $228 15,
Slide 9: Experienced Management Team with a Strong Track Record
EXPERIENCED MANAGEMENT TEAM WITH A STRONG TRACK RECORD Proven leadership with veteran academic and corporate expertise Tom Slagle Dr. Ann Leja Chief Executive Officer Interim President 10 Years with Rasmussen 5 Years with Rasmussen • 20+ years in healthcare with J&J, Baxter, and Cardinal • 25 years
Slide 10: Doubles Revenue & Establishes APEI as a Scale Platform
DOUBLES REVENUE & ESTABLISHES APEI AS A SCALE PLATFORM Rasmussen University further accelerates APEI’s growth story $700 APEI Pro Forma Revenue, • In 2021, nearly doubles APEI’s USD Mn $600 revenue to $600MM, $31MM $600 in net income and $100MM in 90% $500 adjusted EBITDA Pro Forma 2020 Enrollment 1
Slide 11: Accretive, Transformative Acquisition Establishes a Scale Platform
ACCRETIVE, TRANSFORMATIVE ACQUISITION ESTABLISHES A SCALE PLATFORM Synergies and New Capabilities Poised to Amplify APEI Mission of HEROITM • #1 for Pre-Licensure Nursing (ADN/RN & PN/LPN) • Leverage New Shared Services, CBE capabilities • #1 for Military & Veteran Students • Unlock $5M-$10M in pote
Slide 12: Strong Alignment in Mission & Culture
STRONG ALIGNMENT IN MISSION & CULTURE Rasmussen enables learners to maximize their Higher Education Return on Investment or ‘HEROI’ TM Strong Regulatory Track Record Affordable, Inclusive, High Quality HLC, ACEN 45.2% & CCNE graduation rate1 Accredited 84.7% 76.4% retention rate4 90/10 Ratio HEROITM
Slide 13: Accretive, Transformative Acquisition Establishes a Scale Platform
ACCRETIVE, TRANSFORMATIVE ACQUISITION ESTABLISHES A SCALE PLATFORM Synergies and New Capabilities Poised to Amplify APEI Mission of HEROITM 4 3 Value Proposition Expansion Operating Margin 1 Programmatic Expansion 2 Geographic Expansion Expansion leverage technology and strengthen student services a
Slide 14: Accelerating APEI's Value Creation Strategy
ACCELERATING APEI’S VALUE CREATION STRATEGY Expanding Platform Amplifies Our Mission in Helping Learners Maximize HEROI TM APEI Resulting Mix Positions APEI Profile to Rasmussen + Hondros = Growth, Scale and HEROI will be $165M Powerhouse in One-Third Military/Vets, Nursing Education #1 in Educator
Slide 15: Expected Capital Structure & Other Terms
EXPECTED CAPITAL STRUCTURE & OTHER TERMS More than $80 million of cash expected to remain on hand after the close Transaction Financing APEI Pro Forma Capital Structure • ~$175MM fully committed debt • Cash and Equivalents $80MM+ • LT Debt $175MM • ~$125MM cash on hand • Net Debt $90MM • Preferred S
Slide 16: APEI's Preliminary Third Quarter 2020 Results
APEI’S PRELIMINARY THIRD QUARTER 2020 RESULTS Fourth consecutive quarter of enrollment growth at APUS and Hondros Student Metrics Financial Metrics APUS • APEI consolidated revenue of $79.1 • Net course registrations +25% million, an increase of 16.6% year-over-year to 13,500 compared to the third q
Slide 17: Thank You
Thank You Please see important disclosures in the Appendix American Public Education, Inc. 17
Slide 18: Appendix: Disclosures
APPENDIX: DISCLOSURES • Forward looking revenue statements are presented on an annual pro forma basis, assuming that the acquisition was effective as of January 1, 2021 • Nursing market data based on IPEDS and APEI Analysis American Public Education is presenting adjusted EBITDA in connection with i
Slide 19: Appendix: Disclosures (Continued)
APPENDIX: DISCLOSURES (CONTINUED) American Public Education is presenting adjusted EBITDA in connection with its GAAP results and urges investors to review the reconciliation of adjusted net income to the comparable GAAP financial measures that is included in the table below (under the caption “GAAP
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