Edgenuity Acquires Compass Learning to Expand Online, Blended Learning Reach

Associate Editor

Edgenuity today announced its acquisition of Compass Learning, bringing together two well-known ed-tech companies whose digital offerings will now span kindergarten through 12th grade.

Terms of the sale were not disclosed, but Sari Factor, CEO of Edgenuity, said the combined companies will have about 500 employees between Edgenuity’s Scottsdale, Ariz., headquarters and the Austin, Texas, offices of Compass Learning.

Owned by Weld North LLC, Edgenuity provides online curriculum and services for grades 6-12, including preparation for Advanced Placement tests, credit recovery, and intervention. Compass Learning provides intervention and skills instruction in math, reading, and language arts for K-8. Assessments are built into both systems.

“Together, we will be addressing the needs of over 3 million students,” said Factor in a phone interview. On its website, Compass Learning states that it serves more than 2 million students and 70,000 teachers across the U.S.

The two businesses are well-established in the marketplace. Edgenuity was founded in 1998 as Education2020 Inc., and it was purchased for an estimated $50 million in 2011 by Weld North. In 2010, Marlin Equity Partners purchased Compass Learning for $32 million from Reader’s Digest as part of that company’s Chapter 11 bankruptcy.

“Both companies have roots that go back” many years, Factor said.  “Compass was originally founded in 1969 as Prescription Learning. Their founder had a real vision for computer-based instruction for student outcomes,” Factor said.

Besides the alignment of the two companies’ strategies and missions in delivering digital content, they also have similar approaches to implementation of their products, and in “making sure teachers know the computer is a tool—but only a tool—in student success,” she said.

Most of the executive team at Compass Learning will be leaving the company with the acquisition, which closed at midnight Friday, Factor said. The Compass Learning brand will continue to be used, but Factor expects it will eventually be folded under the Edgenuity banner in 2017.

Edgenuity most recently was in the news as one of three companies that had contracted with Mike Hubbard, Alabama’s former  speaker of the house, who last month was convicted and sentenced to four years in prison for felony ethics violations.

Michael Humphrey, executive vice president at Edgenuity, testified in Hubbard’s trial, which centered on charges that the Alabama elected official had used his clout to attract business for companies he leads.

Humphrey testified that he hired Hubbard on a $7,500-per-month consulting contract to connect him to legislative leaders in other states, as Edgenuity tried to sell digital courses.

In an interview, Factor said the controversy had no bearing on the company or its goals. She described the issue as one that pertained only to the “political machinations in the state of Alabama.”

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