Firms Mull Bids For Milken Venture

  • Online educational services company on the block
  • Morgan Stanley tapped to run auction
  • Milken now runs an LA think tank

EmbanetCompass Group Inc., a provider of online higher education services backed by one-time “junk bond king” Michael Milken, has kicked off a sale of the company, sister news service Reuters reported. The company was asking prospective buyers to submit bids by mid-August, people familiar with the matter said.

EmbanetCompass, which partners with more than 35 not-for-profit colleges and universities on online courses, has tapped Morgan Stanley to run an auction, two of the people said. Bain Capital LLC, Providence Equity Partners LLC, Hellman & Friedman LLC and Advent International Corp. are among the firms considering making offers for the business, which could be valued between $550 million and $825 million, the people said. Private equity-backed Cengage Learning is also among the few trade buyers considering an offer, the people said.

The firm could also prove attractive to strategic buyers, they added.

Spokespeople for Embanet, Milken, Cengage, Hellman & Friedman and Advent did not respond to a request for comment while Bain, Morgan Stanley and Providence declined to comment.

EmbanetCompass was formed in 2010 with the merger of Embanet and Compass Knowledge Group, three years after Knowledge Universe Limited LLC, an education firm run by Michael Milken and his brother Lowell, and investment firm Technology Crossover Ventures announced they would become investors in Embanet.

Michael Milken—a pioneer of high-yield debt known as junk bonds, a philanthropist and an exile from the U.S. securities industry who served time in prison for securities fraud—is chairman of the Milken Institute, an economic think tank whose annual conference in Los Angeles attracts major leaders of business and government.

Technology Crossover Ventures, a technology-focused private equity firm with $7.7 billion in capital under management, boasts Facebook Inc., Netflix Inc., Groupon Inc., Expedia Inc. and Orbitz Worldwide Inc. among its investments.

(Nadia Damouni and Greg Roumeliotis are correspondents for Reuters in New York.)