For-profit Kendall College, best known for its culinary arts school, is vacating its Chicago campus and selling its programs to National Louis University.
The price tag for the financially struggling 84-year-old college is $1, according to a filing Wednesday with the Securities and Exchange Commission.
The unusual agreement, announced earlier this week, would fold Kendall’s five degree programs into the broader academic offerings at National Louis, a private nonprofit university, pending approval by federal regulators. The school will move to National Louis’ flagship campus on South Michigan Avenue, while its name will live on as the Kendall College of Culinary Arts and Hospitality Management at NLU.
Kendall is owned by Baltimore-based Laureate Education, a publicly traded company operating a global network of for-profit colleges. As part of the agreement, Laureate will pay up to $14 million to support construction of new facilities at National Louis for the culinary and hospitality programs, according to the SEC filing.
“The process of moving to new facilities will occur over a period of time, which depends in part on the timing of necessary regulatory approval,” Esther Benjamin, a Laureate spokeswoman, said in an email Thursday.
Benjamin said Kendall business students would move to NLU’s campus upon approval, but culinary and hospitality students will remain at Kendall’s current Chicago campus until renovations are complete. The deal is expected to close by the latter half of the year.
“We believe this agreement with NLU represents a thoughtful solution for our current students to continue their education in Chicago at a long-standing institution with a strong mission and academic history, and we are also pleased that the Kendall name will continue,” Paul Lussow, Kendall president, said in a news release.
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Founded as an Evanston junior college in 1934, Kendall offered a broad liberal arts education for much of its history. In 1985, Kendall launched its culinary arts school, which quickly became its signature program, training many of Chicago’s top chefs over the years.
Kendall moved the campus to Goose Island in Chicago in 2005. The school has about 800 students enrolled in baking & pastry, business, culinary arts, early childhood education and hospitality management programs.
Laureate obtained an option to buy Kendall in 2004 and helped build the Goose Island campus. Its plans for the site may become clearer in the coming weeks, Benjamin said.
“Laureate is the leaseholder of the property and will embark on a process soon to consider options for the property,” Benjamin said.
A private company when it bought Kendall for an undisclosed amount in 2008, Laureate has grown rapidly, purchasing 41 schools for $2 billion in the last 10 years. The company went public in February 2017, and now has 70 schools in 25 countries.
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Laureate generated a net income of $366 million on revenues of $4.2 billion in 2016, according to an annual report filed in March.
In its report, Laureate said it intended to continue to expand its business through existing properties and the acquisition of higher education institutions, but apparently Kendall didn’t fit into those plans.
Eilif Serck-Hanssen, chief executive officer of Laureate, said in the news release Tuesday the Kendall sale reflected the company’s efforts “to simplify and focus our operations, while continuing to have a meaningful impact on the communities we serve.”
Laureate is making money, but Kendall is not.
Kendall reported an operating loss of $5.5 million on revenues of $24.2 million for the 12-month period ending Sept. 30, according to Laureate’s SEC filing Wednesday.
In 2015, the Higher Learning Commission, a Chicago-based regional accrediting organization, placed Kendall on financial monitoring for two years “over the school’s continued reliance upon Laureate to provide financial support to sustain its operations,” according to SEC filings.
The sanctions were removed after Kendall submitted an interim financial report in January 2017, commission spokesman Steve Kauffman said Wednesday.
“Increasingly, Kendall faced challenges similar to other small colleges in the U.S.,” the school’s board said in a statement Tuesday. “The Kendall board and leadership took deliberate steps to consider how best to preserve Kendall’s mission in Chicago, in the U.S. and internationally.”
A Kendall spokesman did not respond to a request for additional comment.
Founded in 1886, National Louis was long known as the National College of Education, and offered the first four-year teacher training program in Illinois. In 1990, it took on the name of philanthropist Michael W. Louis, who broadened the school’s mission by helping to establish a separate liberal arts college.
The addition of Kendall’s culinary and hospitality programs creates a third college for the university.
“This agreement provides an excellent opportunity to expand professional pathways through established programs, including culinary arts and hospitality management, and serve more students,” Nivine Megahed, NLU’s president, said in an emailed statement Wednesday.
An NLU spokeswoman said the university was not available to discuss the acquisition further.
Founded as Sylvan Learning Systems in 1989, Laureate got into the higher education business 10 years later with its acquisition of Universidad Europea de Madrid. It entered the online arena with the 2001 purchase of Walden University.
The company sold Sylvan’s supplemental and remedial educational services business in 2003, and took the Laureate name the following year.
Laureate bills itself as the “largest global network of degree-granting higher education institutions,” but its North American presence is limited, with only five institutions based in the U.S., including Kendall.
The company may be best known for recruiting a high-profile spokesman, former President Bill Clinton, who in 2010 signed a five-year contract to serve as honorary chancellor for Laureate.
His term ended in April 2015, two weeks after his wife, Hillary Clinton, began her second and ultimately unsuccessful presidential campaign.