Legacy Education Inc. Completes Acquisition of Contra Costa Medical Career College

Rhea-AI Summary

Legacy Education (NYSE: LGCY) has completed the acquisition of Contra Costa Medical Career College (CCMCC) in Antioch, California for $8 million. The purchase terms include: $6.13 million paid at closing, a $400,000 promissory note, and 118,906 shares of common stock valued at $1 million.

The acquisition expands Legacy Education's presence to six campuses across California, strengthening its allied health education offerings in Northern California. CCMCC provides healthcare training programs including Surgical Technology, Vocational Nursing, and Sonography. This strategic move aims to address the growing demand for healthcare professionals while expanding educational access in the industry.

Positive

• Expansion to six campuses in California, strengthening market presence
• Strategic acquisition in the growing healthcare education sector
• Addition of specialized healthcare programs to existing portfolio
• Majority of acquisition ($6.13M) paid in cash, indicating strong liquidity

Negative

• Significant cash outlay of $6.13M may impact short-term liquidity
• Issuance of shares (118,906) creates dilution for existing shareholders
• Addition of $400,000 in debt through promissory note

Insights

Financial Analyst

<p>The <money>$8 million</money> acquisition of Contra Costa Medical Career College represents a strategic expansion for Legacy Education in the lucrative healthcare education sector. The deal structure, combining cash payment (<money>$6.13 million</money>), a promissory note (<money>$400,000</money>) and equity consideration (118,906 shares valued at <money>$1 million</money>), demonstrates a balanced approach to capital allocation. For a company with a market cap of <money>$103 million</money>, this acquisition represents approximately <percent>7.8%</percent> of its market value, indicating a meaningful but manageable investment.</p><p>The healthcare education market presents substantial growth opportunities, driven by persistent workforce shortages and aging demographics. CCMCC's specialized programs in high-demand fields like Surgical Technology and Vocational Nursing should provide immediate revenue diversification and expansion into Northern California's populous market. The transaction's structure, with most consideration in cash, suggests strong confidence in immediate value creation and operational synergies.</p>

Healthcare Education Specialist

<p>This acquisition strategically positions Legacy Education in the critical allied health education sector, particularly valuable given the severe healthcare workforce shortages across California. CCMCC's program portfolio - including Surgical Technology, Vocational Nursing and Sonography - addresses high-growth segments within healthcare employment. The expansion to six campuses creates a robust educational network that can better serve Northern California's healthcare institutions.</p><p>The timing is particularly advantageous as healthcare employers face unprecedented staffing challenges. Surgical technologists and vocational nurses are experiencing strong demand, with employment growth projected well above average. This acquisition allows Legacy Education to tap into these market dynamics while leveraging CCMCC's established reputation and accreditations to accelerate program expansion.</p>

LANCASTER, Calif., Dec. 18, 2024 /PRNewswire/ -- Legacy Education Inc. ("Legacy Education" or the "Company") (NYSE American: LGCY), a leader in career-focused educational services, is proud to announce the successful completion of its acquisition of Contra Costa Medical Career College ("CCMCC"), located in Antioch, California, pursuant to the execution of its previously announced asset purchase agreement ("APA") on October 30, 2024 for a purchase price of $8,000,000. The purchase price is as follows: (i) $6,133,079.84 was paid at closing (which, pursuant to the APA was $6,600,000 as adjusted for the certain estimated closing capital as set forth in the APA), (ii) a promissory note in the principal amount of $400,000 was issued at closing and (iii) the Company issued 118,906 shares of its common stock equivalent to $1,000,000. The acquisition of CCMCC expands Legacy Education's footprint to six campuses across California, further enhancing its ability to deliver high-quality allied health education in Northern California.

CCMCC has long been recognized for its commitment to excellence in healthcare training, offering programs such as Surgical Technology, Vocational Nursing, Sonography and more. This acquisition aligns with Legacy Education's strategy to meet the increasing demand for skilled healthcare professionals and to expand access to education for students seeking careers in this vital industry.

"We are thrilled to officially welcome Contra Costa Medical Career College to the Legacy Education family," said LeeAnn Rohmann, CEO of Legacy Education. "This acquisition reflects our ongoing commitment to providing accessible, industry-relevant education that empowers students to build meaningful careers. Together, we are better positioned to serve the healthcare sector's growing workforce needs while transforming lives through education."

With this acquisition, Legacy Education strengthens its portfolio and reinforces its mission to innovate and deliver career-ready education. The integration of CCMCC will enhance the availability of cutting-edge training, ensuring students are equipped to excel in their chosen fields.

ABOUT LEGACY EDUCATION

Legacy Education (NYSE: LGCY) is an award-winning, nationally accredited, for-profit post-secondary education company founded in 2009. Legacy Education provides career-focused education primarily in the healthcare field, with certificates and degrees for nursing, medical technicians, dental assisting, business administrative, and several others. The Company offers a wide range of educational programs and services to help students achieve their professional goals. Legacy Education's focus is on providing high-quality education that is accessible and affordable. Legacy Education is committed to growing it's education footprint via organic enrollment growth, addition of new programs and accretive acquisitions. For more information, please visit www.legacyed.com or on LinkedIn @legacy-education-inc.

FORWARD-LOOKING STATEMENTS

Statements in this press release about future expectations, plans, and prospects, as well as any other statements regarding matters that are not historical facts, may constitute "forward-looking statements." The words "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "should," "target," "will," "would" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. The forward-looking statements contained in this press release are based on management's current expectations and are subject to substantial risks, uncertainty and changes in circumstances. A number of important factors could cause actual results to differ materially from those included within or contemplated by the forward-looking statements, including, but not limited to: statements relating to risks arising from the diversion of management's attention from the Company's ongoing business operations to integrate the operations of CCMCC; an increase in the amount of costs, fees and expenses and other charges related to the acquisition; outcome of any litigation that the Company may become subject to relating to the acquisition; risks that the acquisition disrupts plans and operations of the Company and potential difficulties in sellers' employee retention as a result of the acquisition; and the ability to implement business plans, forecasts and other expectations after the completion of the acquisition, realize the intended benefits of the acquisition, and identify and realize additional opportunities following the acquisition, as well as the other risks and uncertainties identified in filings by the Company with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K for the year ended June 30, 2024 as may be amended or supplemented by additional risk factors set forth in subsequent filings made with the Securities and Exchange Commission. All forward-looking statements speak only as of the date of this press release. Consequently, forward-looking statements should be regarded solely as Legacy Education's current plans, estimates, and beliefs. Legacy Education cannot guarantee future results, events, levels of activity, performance or achievements. Legacy Education does not undertake and specifically declines any obligation to update or revise any forward-looking statements to reflect new information, future events or circumstances or to reflect the occurrences of unanticipated events, except as may be required by applicable law.

Contact Legacy Education Inc.
Investor Relations
ir@legacyed.com

Amato and Partners, LLC
Investors Relations Counsel
admin@amatoandpartners.com

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SOURCE Legacy Education Inc.

FAQ

How much did Legacy Education (LGCY) pay for Contra Costa Medical Career College?

Legacy Education paid $8 million total, comprising $6.13 million in cash, a $400,000 promissory note, and 118,906 shares of common stock valued at $1 million.

What programs does CCMCC offer after the LGCY acquisition?

CCMCC offers healthcare training programs including Surgical Technology, Vocational Nursing, and Sonography.

How many campuses does Legacy Education (LGCY) now have in California?

Following the CCMCC acquisition, Legacy Education now has six campuses across California.

When did Legacy Education (LGCY) complete the CCMCC acquisition?

Legacy Education completed the acquisition on December 18, 2024, following the asset purchase agreement announced on October 30, 2024.

What is the strategic importance of the CCMCC acquisition for LGCY?

The acquisition enhances Legacy Education's presence in Northern California's allied health education sector and helps meet the increasing demand for skilled healthcare professionals.