Apollo Education Group Inc., owner of the University of Phoenix, has announced on Monday to be acquired by a consortium of investors for $1.1 billion. Tony Miller, COO (Chief Operating Officer) and Partner of the Vistria Group will become Chairman of the Apollo Education Group Board upon closure of the transaction.

He has also acted as the Deputy Secretary to the U.S. Department of Education. The deal is expected to be closed in August.

The consortium includes The Vistria Group LLC, funds affiliated with Apollo Global Management LLC and Najafi Companies. The offered price of $9.50 per share in cash for both Class A and B shares, accounts for 36.7% premium with the closing price of Apollo stock on Friday, reports StreetInsider.

Share price of Apollo Education has risen to $8.98 in premarket trading. However, Apollo Education's shares have been traded last at $9.50 on October 22. Market value of the company has been estimated to $754.4 million at Friday's closing price, according to a report published in Reuters.

During the most recently concluded fiscal quarter, Apollo Education has encountered a loss of $60.8 million or $0.56 a share. The profit per share stands at $0.29, excluding restructuring charges and other items, which lags behind Wall Street's revised expectations. Even revenue collections have fallen from $714 million to $586 million.

Apollo and other for-profit higher education institutions have witnessed a sliding trend in enrollments. The slide appears amid scrutiny of their recruiting, career outcomes and student-loan default rates. Share prices have been slashed by 73% during the last 12 months, reports The Wall Street Journal.

The for-profit has started to face continued challenges since 2010 due to the crackdown of the federal government on the sector. The situations worsened while the Defense Department has barred the University of Phoenix system from recruiting on military bases in October.

The federal department has removed the university from probationary status last month. It has also restarted the spigot of military tuition assistance funds for the profit seeking college operator.

Barclays, Credit Suisse and Evercore have acted as financial advisers to Apollo Education. Sullivan & Cromwell LLP have served as its legal adviser. However, Paul, Weiss, Rifkind, Wharton & Garrison LLP have rendered legal advisory support to the consortium.

Apollo Education Group Inc. is going to be acquired by a consortium of investors for $1.1 billion. The Phoenix University operator has been going through a crackdown conducted by the US government due to its profit mongering. However, the university operator has succeeded in gaining a hefty profit for the problem ridden $754.4 million enterprise.