Education Company 2U to Buy Coding Boot Camp Firm Trilogy for $750 Million

(Bloomberg) -- 2U Inc., an online education company used by New York University and Harvard University, agreed to buy university-affiliated "boot camp" operator Trilogy Education Services Inc. for about $750 million.

2U will pay $400 million in cash and issue $350 million in stock to buy New York-based Trilogy, the companies said in a statement on Monday, confirming an earlier Bloomberg report. 2U has secured a $250 million loan and will finance the rest with cash on hand, the companies said.

"Their business is a natural strategic fit and growth driver for 2U that will extend our reach across the career curriculum continuum," 2U Chief Executive Officer Christopher Paucek said in a statement.

The deal will accelerate 2U’s plan to hit $1 billion in revenue by one year to 2021 and will increase its clients to 68 universities from 36, the statement said. It will also boost 2U’s presence in the fast-growing enterprise-learning market, in which corporations work with education providers to improve employees’ skills. Trilogy works with some of the U.S.’s largest employers, including General Electric Co., Salesforce.com Inc. and Bank of America Corp.

Both firms’ boards have approved the deal, which is expected to close in the next 60 days. 2U expects to keep almost all of Trilogy’s current employees and will enter into new agreements with key members of the management team, according to the statement.

2U fell 4.8 percent $66.74 at 9:45 a.m. in New York, giving the Lanham, Maryland-based company a market value of about $3.9 billion.

The company announced a partnership last year with WeWork Cos. that would allow its students space to study in WeWork offices.

Closely held Trilogy offers technology-focused courses to universities and businesses to help fill digital skills gaps. The company had raised $80 million in equity funding since 2017 from investors including Highland Capital Partners.

Citigroup Inc. advised 2U while Trilogy worked with Morgan Stanley on the transaction, according to the statement.

To contact the reporters on this story: Ed Hammond in New York at ehammond12@bloomberg.net;Michael Boyle in New York at mboyle40@bloomberg.net

To contact the editors responsible for this story: Elizabeth Fournier at efournier5@bloomberg.net, Amy Thomson, Fion Li

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