2U Takes Strategic Action to Significantly Strengthen Balance Sheet and Position Company for Innovation and Growth
2U, Inc. (TWOU), a global leader in online education, has initiated a financial restructuring to strengthen its balance sheet and position for growth. The company has entered into a Restructuring Support Agreement (RSA) with lenders and noteholders, which will:
- Provide approximately $110 million of new capital
- Reduce debt by over 50% to about $459 million
- Extend loan maturity dates by over two years
To implement this, 2U filed for Chapter 11 bankruptcy protection, expecting to complete the process by September 2024. The company assures that all educational programs and services will continue without interruption. Following court approval, 2U plans to emerge as a private company backed by existing lenders and noteholders.
2U, Inc. (TWOU), un leader globale nell'istruzione online, ha avviato un piano di ristrutturazione finanziaria per rafforzare il proprio bilancio e posizionarsi per la crescita. L'azienda ha stipulato un Accordo di Supporto alla Ristrutturazione (RSA) con i finanziatori e gli obbligazionisti, che prevede:
- Un capitale nuovo di circa 110 milioni di dollari
- Una riduzione del debito di oltre il 50% a circa 459 milioni di dollari
- Un'estensione delle scadenze dei prestiti di oltre due anni
Per attuare questo, 2U ha presentato richiesta di protezione ai sensi del Capitolo 11, con l'aspettativa di completare il processo entro settembre 2024. L'azienda assicura che tutti i programmi e i servizi educativi continueranno senza interruzioni. A seguito dell'approvazione del tribunale, 2U prevede di riemergere come una società privata sostenuta dai finanziatori e dagli obbligazionisti esistenti.
2U, Inc. (TWOU), un líder global en educación en línea, ha iniciado una reestructuración financiera para fortalecer su balance y posicionarse para el crecimiento. La empresa ha firmado un Acordo de Apoyo a la Reestructuración (RSA) con prestamistas y tenedores de notas, que incluirá:
- Un nuevo capital de aproximadamente 110 millones de dólares
- Una reducción de la deuda de más del 50% a alrededor de 459 millones de dólares
- Una extensión de las fechas de vencimiento de los préstamos de más de dos años
Para implementar esto, 2U se declaró en bancarrota bajo el Capítulo 11, con la expectativa de completar el proceso para septiembre de 2024. La empresa asegura que todos los programas y servicios educativos continuarán sin interrupciones. Tras la aprobación del tribunal, 2U planea emerger como una empresa privada respaldada por los prestamistas y tenedores de notas existentes.
2U, Inc. (TWOU)는 글로벌 온라인 교육의 선두주자로서 재무 구조조정을 시작하여 재무 상태를 강화하고 성장할 수 있는 기반을 마련하고 있습니다. 이 회사는 대출자 및 채권자와 함께 구조조정 지원 계약(RSA)을 체결하였으며, 이는 다음을 포함합니다:
- 약 1억 1천만 달러의 새로운 자본 제공
- 부채를 50% 이상 줄여 약 4억 5천9백만 달러로 감소
- 대출 만기 연장 2년 이상
이를 실행하기 위해 2U는 챕터 11 파산 보호를 신청하였으며, 2024년 9월까지 이 과정을 완료할 것으로 예상하고 있습니다. 이 회사는 모든 교육 프로그램과 서비스가 중단 없이 계속될 것이라고 보장하고 있습니다. 법원의 승인이 있은 후, 2U는 기존의 대출자 및 채권자에 의해 지원되는 사기업으로 재출발할 계획입니다.
2U, Inc. (TWOU), un leader mondial de l'éducation en ligne, a initié une restructuration financière pour renforcer son bilan et se positionner pour la croissance. L'entreprise a conclu un Accord de Soutien à la Restructuration (RSA) avec les créanciers et détenteurs d'obligations, qui comprendra :
- Environ 110 millions de dollars de nouveau capital
- Une réduction de la dette de plus de 50% à environ 459 millions de dollars
- Une extension des dates d'échéance des prêts de plus de deux ans
Pour mettre cela en œuvre, 2U a déposé une demande de protection en vertu du Chapitre 11, s'attendant à compléter le processus d'ici septembre 2024. L'entreprise garantit que tous les programmes et services éducatifs continueront sans interruption. Après approbation du tribunal, 2U prévoit de réémerger en tant que société privée soutenue par les créanciers et détenteurs d'obligations existants.
2U, Inc. (TWOU), ein globaler Marktführer im Bereich Online-Bildung, hat eine finanzielle Restrukturierung eingeleitet, um seine Bilanz zu stärken und sich für weiteres Wachstum zu positionieren. Das Unternehmen hat eine Restrukturierungsunterstützungsvereinbarung (RSA) mit Kreditgebern und Anleiheinhabern abgeschlossen, die Folgendes vorsieht:
- Bereitstellung von etwa 110 Millionen Dollar neuen Kapitals
- Reduzierung der Schulden um über 50% auf etwa 459 Millionen Dollar
- Verlängerung der Fälligkeiten von Darlehen um mehr als zwei Jahre
Um dies umzusetzen, hat 2U einen Antrag auf Insolvenzschutz nach Kapitel 11 gestellt und erwartet, den Prozess bis September 2024 abzuschließen. Das Unternehmen sichert zu, dass alle Bildungsprogramme und -dienstleistungen ohne Unterbrechung fortgesetzt werden. Nach der gerichtlichen Genehmigung plant 2U, als Privatunternehmen mit Unterstützung der bestehenden Kreditgeber und Anleiheinhaber aufzutauchen.
- Infusion of approximately $110 million in new capital
- Debt reduction by over 50% to approximately $459 million
- Extension of loan maturity dates by over two years
- Expected quick completion of Chapter 11 process by September 2024
- Continued operation of all educational programs without disruption
- Filing for Chapter 11 bankruptcy protection
- Transition from public to private company ownership
- Potential impact on existing shareholders' equity
2U's strategic financial restructuring is a significant move that could reshape the company's future. The deal to eliminate over
The reduction of debt from roughly
However, investors should note that emerging as a private company means current shareholders will likely see their equity wiped out. This restructuring, while necessary for 2U's survival, underscores the challenges faced by many edtech companies in achieving sustainable profitability. The involvement of experienced education industry figures like Brian Napack in the investor group suggests a strategic vision for 2U's future, but execution will be key in a competitive and evolving online education landscape.
2U's restructuring reflects broader trends in the edtech sector, where many companies are grappling with post-pandemic market corrections. The company's ability to maintain its partnerships and continue operations during this process is crucial. The emphasis on "no interruption for partners or learners" is vital for preserving 2U's reputation and market position.
The injection of new capital could potentially fuel innovation in 2U's educational offerings, which is essential in the rapidly evolving online learning space. However, the company will need to navigate carefully to balance cost-cutting measures with necessary investments in technology and content development.
The transition to a private company structure might allow 2U more flexibility to implement strategic changes without the pressures of quarterly earnings reports. This could be beneficial for long-term planning and execution of its educational mission. However, it also means less transparency for the public and educational partners, which could pose challenges in a sector where trust and reputation are paramount.
The success of this restructuring will largely depend on 2U's ability to adapt its business model to changing market dynamics, including increased competition from both traditional institutions and new edtech entrants. The company's future growth will hinge on its capacity to innovate and deliver value to both learners and institutional partners in an increasingly crowded online education marketplace.
Company enters into agreement with its debtholders to eliminate over
All educational programs and services to continue seamlessly with no interruption for partners or learners
To implement the transaction, 2U and certain domestic subsidiaries filed voluntary "prepackaged" Chapter 11 cases in the
"Today marks an important milestone for 2U. New capital and a healthier balance sheet will enable us to continue our long-standing mission," said Paul Lalljie, Chief Executive Officer of 2U. "For over 15 years, 2U has led the online learning industry in the delivery of innovative, high-impact education in partnership with an unmatched network of leading universities. The steps we are taking today will enable us to continue investing in our offerings, services, and world-class team to deliver unparalleled online learning to meet the needs of students today. As we move towards the successful completion of this transaction, we are steadfastly focused on what matters most: our partners and learners."
2U has filed a number of customary motions with the court to ensure that its operations continue as usual while it implements this transaction. All programs will proceed as planned with no impact or disruption to learners as a result of this process, and 2U will continue providing all services for partners and students. Additionally, the RSA contemplates that payments to vendors will continue in the ordinary course.
Following court approval and the completion of the transaction, 2U expects to emerge from Chapter 11 as a private company backed by its existing lenders and noteholders, including funds managed by Mudrick Capital Management, LP, Greenvale Capital LLP, and Bayside Capital, LLC.
"2U is a true pioneer in the delivery of education that changes lives," said Brian Napack, Strategic Advisor to the investment group. "This company's role in the education ecosystem and its innovative approaches to increasing education access are more important than ever, and this financing demonstrates the investors' deep belief in 2U and commitment to its essential mission." Mr. Napack is a longtime executive, director, investor and advisor in the education industry, and is the former CEO of John Wiley (WLY), Chairman of the Association of American Publishers, and Senior Advisor at Providence Equity.
Additional information regarding 2U's Chapter 11 process is available at https://dm.epiq11.com/2U. Stakeholders with questions may call the Company's Claims Agent, Epiq, at 877-525-5725 or +1 360-803-4441 if calling from outside the
Advisors
Latham & Watkins LLP is serving as legal counsel, Moelis & Company is serving as investment banker, AlixPartners LLP is serving as financial advisor, and C Street Advisory Group is serving as strategic communications advisor to the Company. Weil, Gotshal & Manges LLP is serving as legal counsel to the ad hoc group of noteholders of the Company, Schulte Roth & Zabel LLP is serving as counsel to Greenvale Capital, LLP, and Houlihan Lokey is serving as investment banker to the ad hoc group of noteholders and
About 2U, Inc. (Nasdaq: TWOU)
2U is a global leader in online education. Guided by its founding mission to eliminate the back row in higher education, 2U has spent 15 years advancing the technology and innovation to deliver world-class learning outcomes at scale. Through its global online learning platform edX, 2U connects more than 86 million people with thousands of affordable, career-relevant learning opportunities in partnership with 260 of the world's leading universities, institutions, and industry experts. From free courses to full degrees, 2U is creating a better future for all through the power of high-quality online education. Learn more at 2U.com.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements in this press release that are not historical are forward-looking statements, including statements regarding the timing and implementation of the restructuring pursuant to the Restructuring Support Agreement (the "RSA"), the chapter 11 cases (the "Chapter 11 Cases"), the prepackaged joint plan of reorganization (the "Plan"), the Company's ability to continue operating in the ordinary course while the Chapter 11 Cases are pending, and the potential benefits of the transactions contemplated by the RSA and the Plan, including the timetable for completing such transactions, if at all, and the effects of such transactions on the Company's financial position and long-term stability and growth. Forward-looking statements contain words such as "expect," "anticipate," "could," "should," "intend," "plan," "believe," "seek," "see," "may," "will," "would," or "target." Forward-looking statements are based on the Company's current expectations, beliefs, assumptions, and estimates concerning the future and are subject to significant business, economic, and competitive risks, uncertainties, and contingencies. These risks, uncertainties, and contingencies are difficult to predict, and could cause the Company's actual results to differ materially from those expressed or implied in such forward-looking statements.
These risks include, among others, those related to the effects of the Chapter 11 Cases on the Company and the Company's relationship with its various constituents, including colleges and universities, faculty, students, regulatory authorities, including the Department of Education, employees and other third parties; the Company's ability to develop and implement the Plan and whether that Plan will be approved by the bankruptcy court and the ultimate outcome of the Chapter 11 Cases in general; the length of time the Company will operate under the Chapter 11 Cases; the potential adverse effects of the Chapter 11 Cases on the Company's liquidity and results of operations, including failure to receive proceeds under the debtor-in-possession financing facility (the "DIP Facility"); the Company's ability to operate within the restrictions and the liquidity limitations of the DIP Facility and any other credit facility that the Company may enter into in connection with the Chapter 11 Cases and restrictions imposed by the applicable courts; the timing or amount of any recovery, if any, to the Company's stakeholders; the potential cancellation of the Company's common stock in the Chapter 11 Cases; the delisting and deregistration of the Company's common stock and becoming a private company; the potential material adverse effect of claims that are not discharged in the Chapter 11 Cases; uncertainty regarding the Company's ability to retain key personnel; increased administrative and legal costs related to the Chapter 11 process; changes in the Company's ability to meet its financial obligations during the Chapter 11 process and to maintain contracts that are critical to its operations; the effectiveness of the overall restructuring activities pursuant to the Chapter 11 Cases and any additional strategies that the Company may employ to address its liquidity and capital resources, achieve its stated goals, and continue as a going concern; the actions and decisions of equityholders, creditors, regulators, and other third parties that have an interest in the Chapter 11 Cases, which may interfere with the ability to confirm and consummate the Plan; and those risks described under the heading "Risk Factors" in 2U's Annual Report on Form 10-K for the year ended December 31, 2023, 2U's Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, and 2U's other filings with the
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SOURCE 2U, Inc.
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