- Online program manager Noodle is buying key assets of HotChalk, another OPM, which the company says will give it more capacity to offer marketing services in-house.
- Noodle will get HotChalk’s academic programs with New York University and two Concordia University sites, as well as Creative Communications Associates, a higher education marketing firm HotChalk owns.
- HotChalk found itself in hot water earlier this year with longtime partner Concordia University Portland, whose recent closure prompted a $302 million lawsuit from the OPM.
Concordia became enmeshed with HotChalk over more than a decade, so much so that the university “appeared trapped … even as the deal drained its cash reserves,” The Oregonian reported. The relationship prompted an investigation by the U.S. Department of Education, which resulted in a $1 million settlement.
The university, like many others that turn to OPMs, hoped working with HotChalk would help it grow. But Concordia’s enrollment fell and debts mounted while its leaders took home big paychecks. The university could have to pay HotChalk as much as $400 million, according to The Oregonian. The OPM also laid off 75 people earlier this year.
Noodle, meanwhile, announced in June it raised $16 million to help “accelerate its growth.” And this month, the company tweaked its name from Noodle Partners to Noodle, an effort to bring its network of ed tech partners and university customers under a single banner, according to a company statement.
So its latest deal isn’t simply an OPM buying another OPM, said Phil Hill, an ed tech consultant with the firm MindWires.
“You have a highly invested company that fell apart, and another company who needs to consolidate and get bigger,” Hill said.
Adding the marketing agency, in particular, will expand Noodle’s capacity in one of OPMs’ core areas. Marketing and recruitment are the most common jobs for which colleges hired OPMs, according to a survey published earlier this year.
While Noodle has historically called on outside companies to provide specific services for its college partners, it has “slowly started” bringing those functions in-house, said its president, Keri Hoyt.
The company expects to do more digital marketing and SEO work itself as a result of the acquisition, Hoyt said.
Noodle will also take over HotChalk’s partnership with New York University’s Steinhardt school for its teacher residency and education leadership and innovation programs. And it will take over teach-out programs at Concordia University’s Nebraska and Chicago sites.
HotChalk’s CEO, Rob Wrubel, will become Noodle’s chief marketing officer. In all, Noodle will add 54 people from the acquisition, Hoyt said.
Hoyt couldn’t disclose the cost of the acquisition.
Noodle isn’t the only OPM growing through acquisition. Earlier this year, Wiley, which has an OPM business, bought training company Mthree for $129 million, after buying OPM Learning House in 2018. Zovio has also acquired a boot camp and tutoring company as it shifts from for-profit college operator into an education services company.
More consolidation is expected, Patrick Brothers, co-CEO of education market research firm HolonIQ, wrote in an email. But it’s “less likely to be consolidation of the larger players” and more likely to be of companies or teams that support a set of universities in specialty areas, such as healthcare or tech, or those with specific digital capabilities.
The market has also been growing, particularly as the pandemic pushes colleges online. Some institutions are looking to OPMs for help launching online programs quickly — and they are providing, as Education Dive reported last month.
“When we look back on this period, COVID may be the single largest accelerant of public-private partnerships in higher education,” Brothers wrote.
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