Eastern Gateway in Talks to Acquire Argosy University
STEBUENVILLE, Ohio – Eastern Gateway Community College is in discussions to acquire Argosy University from Dream Center Educational Holdings. If completed, the deal would add campuses nationwide and thousands of students to the Steubenville-based community college.
Dream Center, which also operates Art Institutes and South University, filed for receivership in federal court Jan. 18. Argosy has 17,600 students enrolled and has sites in Arizona, California, Florida, Georgia, Hawaii, Illinois, Minnesota, Texas, Utah, Virginia and Washington. It also operates online programs.
“Last summer, EGCC was approached to see if it could assist in a restructuring of Argosy University,” said Eastern Gateway President Jimmie Bruce in a release. “The approach was made because of our very successful online programs. The board of trustees of Eastern Gateway directed that we explore a potential transaction to see if something could be structured that was in the interest of our college and community. This in no way affects our present students, faculty and staff.”
To help with the negotiations, the state attorney general’s office has provided a special counsel, while senior officials at the Department of Education have also been in direct contact with the community college.
“Discussions and diligence are ongoing, and we hope they will conclude with a structure that best serves both the students of Argosy and the strategic mission of EGCC,” Bruce said. “We will make an announcement once discussion are finalized.”
Dream Center has owned Argosy, Art Institutes and South University since 2017. It purchased the three schools from the for-profit Education Management Corp. and has since converted them into nonprofit entities. Dream Center closed about 30 campuses at the end of 2018.
“Within 60 days of the final closing and after completing the opening balance sheet audits DCEH discovered that the actual revenues fell far short of the projections provided by EDMC, in an amount in the tens of millions of dollars, while overhead fixed costs were significantly in excess of the EDMC’s representations,” Dream Center said in its court filing. “DCEH’s efforts to instill best practices organization-wide and reduce enormous corporate inefficiencies clearly would not be enough to balance what was now projected to be a substantial operating deficit.”
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