BPP parent company writes off one third of school's value in wake of downturn
More than a third of BPP's purchase value of £303.5m has been written off by its US parent company Apollo Global, according to the education provider's US Securities and Exchange Commission (SEC) filings. The accounts, which cover the financial year ending 31 December 2009, state that the BPP incurred "impairment charges" of £106m, representing a 35% drop in value. This is Apollo's first "goodwill impairment test" for BPP since its takeover last year, with the US parent company reassessing BPP's financial outlook in the wake of the recession in the UK.
November 26, 2010 at 04:57 AM
2 minute read
More than a third of BPP's purchase value of £303.5m has been written off by its US parent company Apollo Global, according to the education provider's US Securities and Exchange Commission (SEC) filings.
The accounts, which cover the financial year ending 31 December 2009, state that the BPP incurred "impairment charges" of £106m, representing a 35% drop in value.
This is Apollo's first "goodwill impairment test" for BPP since its takeover last year, with the US parent company reassessing BPP's financial outlook in the wake of the recession in the UK.
In a statement, Apollo said that autumn enrolment levels at BPP had been "adversely impacted" by the economic downturn.
Despite the impairment charges detailed in the account, the SEC listing showed a revenue increase at BPP of $20.5m (£13m) for the 2009 financial year.
Apollo Global is a joint venture owned by US education provider Apollo Group and private equity house Carlyle Group.
Last year's takeover of BPP – which handed roles to Macfarlanes and Eversheds for BPP and Apollo respectively – saw the creation of Apollo UK, a wholly-owned subsidiary of Apollo Global.
The news is likely to raise questions about the prospects for private education providers in the UK, especially in the wake of BPP's announcement that it is to launch three new bases in Cambridge, Liverpool and Newcastle next year.
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