Strayer Education Inc. (NASDAQ:STRA) Q1 2018 Earnings Conference Call - Final Transcript

May 02, 2018 • 10:00 am ET


Strayer Education Inc. (NASDAQ:STRA) Q1 2018 Earnings Conference Call - Final Transcript


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Karl McDonnell

the merger agreement in October.

At the outset of our planning, both companies established business continuity as a key priority, as we work to build our integration plans. And with this morning's announcements, I'm pleased that both Strayer and Capella have reported strong enrollment in financial results during a period, where many representatives of the companies respective management teams have been involved in detailed planning of the integration.

The integration planning itself is organized into three primary categories. First, we're conducting a detailed cultural assessment to understand the unique attributes of each organization's operating model that must be preserved, while also identifying opportunities to immediately port over best practices and other proprietary insights and methodologies.

The second major work stream involves identifying the synergies resulting from combining our corporate back-office functions post-close, such as finance, legal, human resources and IT.

Our planning has been -- sorry, and the third area is preparing for day one close itself to make sure that all of our systems and processes have been stress tested. The planning has been highly collaborative, rigorous and detailed, and presently our plans call for the following.

Overall, we have identified $50 million in run rate savings to be fully implemented by the end of 2019 or approximately 18 months post-close pending our final pre-close regulatory approval in June. Of the $50 million in run rate savings, approximately $20 million will be implemented in 2018, and the remaining $30 million achieved in 2019. Excluding transaction-related expenses, we estimate the integration costs will equate to the synergy savings themselves at roughly dollar-for-dollar.

Finally, I'd like to thank both the Strayer and Capella teams for their professionalism, hard work and ongoing commitment to the merger success, which ultimately we believe will create the best platform to serve our students and learners in the years ahead.

And with that, operator, we'd be glad to take any questions.