US: Zovio divests OPM business and announces losses
Chandler, Arizona-based Zovio, an ed tech services company that partners with higher education institutions and employers, is selling its online programme management (OPM) business to the University of Arizona Global Campus (UAGC).
Under the asset purchase agreement, UAGC is acquiring Zovio’s operations and assets that previously provided services to UAGC through a long-term strategic services agreement.
Zovio stated it is attempting to rightsize the company, “accelerating growth of subsidiaries and exploring strategic alternatives, which included the potential divestiture of all three of its businesses”.
In May, Zovio sold TutorMe, for $55 million and used a portion of the proceeds to repay bridge financing. This left the company debt free and allowed Zovio to satisfy obligations stemming from a fine issued by the Superior Court of California while the company appeals the decision.
Zovio’s chief executive Randy Hendricks said: “Zovio has been at the forefront of providing innovative online learning products and services for almost two decades. We are pleased to have reached this agreement with UAGC and are excited about their future.”
Zovio said it will continue to support the continued growth and expansion of Fullstack Academy and simultaneously explore strategic alternatives for that business.
The company also announced today a second-quarter 2022 net loss of $4.7 million, compared to a net loss of $4 million reported for Q2 2021. Revenue for the quarter was $51.4 million, down from $69.2 million reported for the second quarter last year.
Zovio also reported results for the first six months 2022. Its net loss for the period was $12.1 million, compared to a net loss of $13.5 million reported for the first six months of last year. Revenue for the six-month period was $113 million, down from revenue of $146 million reported for the first six months of 2021.