August 06, 2013
By Eric Kelderman
For nearly three decades, the test-preparation and education company Kaplan Inc. has relied on the prestige and integrity of its corporate owner, the Washington Post Company, to promote its brand.
But The Washington Post announced on Monday that Jeff Bezos, founder of Amazon.com, had purchased the newspaper division of the company for $250-million.
Kaplan and its subsidiaries, including Kaplan Higher Education and its mostly online Kaplan University, will remain part of the publicly traded Washington Post Company and will continue operating largely as they were before the sale of the newspaper, said Rima Calderon, a spokeswoman for the Post Company. The parent company will also continue, though under a new, still unspecified name.
But Kaplan's prominence within that company will grow as a result of the sale of the newspaper. In its 2012 annual report, the Post Company reported that education accounted for 55 percent of its revenue. Without the newspaper division, education will account for nearly two-thirds of the company's revenue.
It's not clear how the newspaper's split from the rest of the company will affect the performance of those other businesses, which include cable and network television stations.
Kaplan, like many other for-profit higher-education companies, has already seen a decline in its fortunes primarily because of falling enrollment. Enrollment at Kaplan Higher Education and Kaplan University dropped from more than 67,000 students at the end of June 2012 to about 62,000 at the end of June 2013, a decline of about 8 percent, according to the company's filings with the U.S. Securities and Exchange Commission.
Revenue at Kaplan Higher Education fell 9 percent for the first six months of 2013, compared with the same period in 2012, according to its most recent report to the commission.
The company blamed the trend on weaker market demand and the fact that it is closing or consolidating more than a dozen campuses across the country.
Direct link to article: http://chronicle.com/article/Kaplan-Will-Dominate-New/140887/