Bain Capital Leads Group to Buy For-Profit School Penn Foster
(Bloomberg) -- Bain Capital is purchasing a Pennsylvania for-profit school, entering an embattled higher-education sector to address the skills gap of U.S. workers.
The Boston-based private equity firm led a group in acquiring Penn Foster from Vistria Group, a Chicago-based private investment firm, according to a statement Tuesday. Bain used its socially-responsible fund to make the purchase. No terms were disclosed.
Bain Capital is making the investment as employers face challenges finding properly-trained workers for jobs that require less than a four-year college degree but more than a high school education. Penn Foster helps educate workers in sectors such as retail, healthcare, manufacturing and solar energy.
“There is an incredible amount of enthusiasm with large employers to see work forces get up-skilled,” Warren Valdmanis, a managing director on Bain Capital’s socially-responsible team called Bain Double Impact, said in an interview. “In the next 10 to 20 years, the amount of transformation in the workforce will be extraordinary.”
In recent years, for-profit schools have come under fire as students were left with massive debt and few job prospects. The issue resulted in declining enrollments and for-profit conversions into nonprofits.
Under the Obama administration, funding was blocked to for-profit programs that left students significantly in debt and with what some employers deemed worthless degrees. The Trump administration has supported workplace development programs and isn’t putting as much pressure on for-profits.
Penn Foster doesn’t accept student loans or direct government funding, according to the statement. “It lets students pay-as-they-go at a low cost," Frank Britt, chief executive officer of Penn Foster, said in an interview.
Penn Foster, based in Scranton, Pennsylvania, has more than 30,000 graduates each year, according to the statement.
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