Buying and Selling Online Schools: The Unusual Career of Michael Clifford (Part 5)

SM: Who do you consider to be potential acquirers of your schools?

MC: Bridgepoint, Grand Canyon, DeVry, Apollo, ITT, Strayer, Touro, EDMC, Capella, and APEI. I believe that most of the big public companies are looking for acquisitions.

SM: Your game plan is to find these niches and build them up to profitability, at which time you can consider selling to larger companies?

MC: We can either sell them or keep them for dividends.

SM: What is the story of Chancellor?

MC: Just over three years ago, a regulator called me and told me about a school with a great history that was about ready to go out of business. I studied the history of the school, because unlike other companies that buy schools, I really have to fall in love with the school’s mission and keep it intact. My goal is to grow the school based on the mission. I am not opposed to enhancing or adding to it, but I like keeping it the same.

I really liked Chancellor’s business mission. Chancellor is 157 years old, and  past students include John D. Rockefeller, Harvey Firestone, and Theodore Ernst. Many of the American titans of business had attended the school. We had made a $25 million offer to the board two years earlier, but they had turned us down. I stayed in touch with the president and faculty, and the school continued to decline until it went into a form of receivership bankruptcy.

I met with the judge and asked if we could bid. We were one of 13 bidders for the school, and all of the big public companies wanted to buy it because they would be getting a license in Ohio. We were fortunate in that we won the bid. We didn’t win because we were the highest bidder but rather because we promised to keep the mission in place. Part of that mission was to teach first-generation college students. I love helping the poor, and I think that education is the key to prosperity and to world peace.

When we won the bid, the school had about 30 students. Today it has about 400. We have invested $16 million  in the past nine months building the infrastructure for the ground operation and launching the online operation. It is a great school that has Associate of Arts, Bachelor of Arts and MBA degrees.

SM: This was a regular school. It sounds more like a Grand Canyon University-type of school.

MC: True, but its history has been all business. It does not teach nursing, education or engineering. It does have a criminal justice and paralegal program that grew out of the business requirements. I was friends with Jack Welch and had been asking him for five years to work with me to create a business school based around his legacy. Jack looked at this school and our success in the past, and agreed that this was a good situation.

Jack has been incredibly involved in the writing of the curriculum. We are really charging forward here. By creating the business niche and putting a high-quality brand name on the school, we have become profitable in less than one year. I believe that with Jack’s help it will turn into a multi-billion- dollar business school.

This segment is part 5 in the series : Buying and Selling Online Schools: The Unusual Career of Michael Clifford
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