Perdoceo signs South University acquisition agreement with $150 million initial cash payment

Perdoceo Education Corporation (NASDAQ: PRDO) signed a Membership Interest Purchase Agreement on September 14, 2026 to acquire 100% of South University Savannah, LLC from South University – Member, Inc. The filed terms call for an initial $150 million cash payment at closing, subject to adjustments, with additional deferred and contingent payments. The acquisition has not closed: Perdoceo expects completion as early as April 2027, subject to educational regulatory and accreditor consents, antitrust review requirements and other customary conditions (Form 8-K AccNo 0001193125-26-389857).

Cash payment remains subject to adjustment

Item 1.01 of Perdoceo’s Form 8-K sets the initial cash payment at $150 million. That amount will be adjusted for cash, net working capital and certain agreed debt-like items using South’s balance sheet as of the beginning of April 2027, as well as indebtedness and seller transaction expenses outstanding at closing. The stated initial payment therefore does not establish the final cash amount Perdoceo will pay on the closing date.

Perdoceo also expects to pay $18 million in deferred cash consideration in installments over the 24 months following closing. A separate earn-out provides for up to $56 million in cash payments tied to specified EBITDA thresholds for fiscal years 2027, 2028 and 2029. Those performance-based payments depend on the relevant milestones being achieved; they are not an unconditional payment obligation for the full amount.

The company expects to fund the purchase price, deferred consideration and any earn-out payments entirely from available cash balances. The agreement’s combination of closing adjustments, installment payments and contingent consideration means the initial payment alone does not describe all potential cash outlays. The verified disclosure does not establish the final adjusted closing payment or whether the earn-out thresholds will be met.

South brings health sciences programs and an online business

Founded in Savannah, Georgia in 1899, South University offers postsecondary training and licensing programs primarily in nursing, healthcare, pharmacy, business technology, legal studies, public administration and public health. Its operations include 11 campus locations across Georgia, Florida, Alabama, South Carolina, Virginia, Texas and North Carolina, alongside South University Online. The acquisition would bring that campus and online operation under Perdoceo’s ownership if the transaction closes.

For the year ended December 31, 2025, South reported unaudited revenue of approximately $291 million. Separately, Item 1.01 discloses approximate company-adjusted operating income of $34 million for the same year, defined as net income plus depreciation, amortization and interest. The filing defines the latter as a non-GAAP measure calculated by adding depreciation, amortization and interest to South’s net income. These historical, unaudited figures describe the target’s disclosed scale; they do not establish its future earnings contribution to Perdoceo.

South served approximately 10,500 undergraduate and graduate students registered for courses during 2025. That figure describes students served during the year, rather than a disclosed enrollment count on the agreement date. South is institutionally accredited by the Southern Association of Colleges and Schools Commission on Colleges through 2034. The existing accreditation period does not remove the acquisition’s separate closing conditions.

April 2027 is the earliest expected close

Perdoceo’s expectation of completing the acquisition as early as April 2027 remains conditional. Required steps include applicable educational regulatory and accreditor consents and expiration or termination of any applicable waiting period under the Hart-Scott-Rodino antitrust law. Other conditions include the absence of injunctions or other legal restraints, accuracy of representations and warranties, and compliance with pre-closing covenants. The disclosure does not establish that these conditions have been satisfied.

The seller, South University – Member, Inc., is a Delaware nonprofit, nonstock corporation. The transaction concerns all membership interests in South University Savannah, LLC, a Georgia limited liability company. Following closing, South will operate as a for-profit institution. That operating status is a planned consequence of completion, not a change established merely by signing the purchase agreement.

The agreement’s representations and warranties will not survive closing. Perdoceo’s primary recourse for breaches of seller representations is a buyer-side representations and warranties insurance policy, subject to customary conditions, exclusions and deductibles, that survives for at least three years after closing. This insurance arrangement should not be read as a statement that the contractual representations themselves survive.

Filing and furnished press material have distinct roles

The September 14 Form 8-K reports the definitive agreement under Item 1.01, with the purchase agreement listed as Exhibit 2.1. The accompanying press release is Exhibit 99.1 and is furnished under Item 7.01. The transaction terms presented here use the filed Item 1.01 initial cash payment of $150 million, subject to adjustment. The filing was accepted at 08:00:07 ET on September 14.

The next substantive milestones are the necessary consents and satisfaction of closing conditions. Until completion, the announced transaction remains a signed agreement. Final closing cash, the achievement of the earn-out milestones and the ability to close on the earliest expected timetable remain unresolved in the verified disclosure.

Filing reference

Perdoceo Education Corporation disclosed the Membership Interest Purchase Agreement in Form 8-K AccNo 0001193125-26-389857 (Items 1.01, 7.01 and 9.01; earliest event September 14, 2026; accepted September 14, 2026 at 08:00:07 ET).