long known for its standardized tests before more recently pursuing a broader mission of research, education and college and career readiness — this week announced a major collaboration with a large California investment firm, shifting the Iowa City-based ACT from a nonprofit to for-profit company.
Upon closing the deal with Nexus Capital Management LP, a Los Angeles private equity firm, ACT and an education data research organization it owns will operate as a “single, unified public benefit corporation.”
Essentially, according to a spokesperson, ACT will become “a type of for-profit company, under the ACT name and brand.”
“This partnership will create more pathways to degrees, credentials, and skills acquisition for people at any stage of their lives,” Daniel A. Domenech, chair of ACT’s board of directors and former executive director of the School Superintendents Association, said in a statement. “The time is right to move into the next phase of ACT’s long-term growth strategy alongside a partner with significant industry expertise, giving ACT the scale and capital necessary to deliver on its promise of education and workplace success.”
As a nonprofit, ACT’s past public filings show budget deficits every year between 2019 and 2022 — with 2023 filings not yet public. Those deficits total $113.5 million, including a loss of $60.6 million in 2020 alone. The last year ACT reported a surplus was in 2018, of $21.3 million.
Upon closing with Nexus, ACT will fully unify with Encoura — an education data science and research company it acquired in 2018 and since has been operating as a “wholly owned subsidiary of ACT.”
“ACT and Encoura will begin operating as a single, unified public benefit corporation, with ACT’s name and brand, upon close,” an ACT spokesperson said. “The integrated business, known as ACT, will advance the organization’s leadership in education and workforce readiness as it serves the needs of all ACT stakeholders through new investments in ACT’s products and people.”
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ACT Chief Executive Officer Janet Godwin will continue to lead the new company.
“Our partnership with Nexus Capital Management uniquely positions ACT to meet a watershed moment in our nation, as the demand for talent is growing and becoming more diverse,” Godwin said in a statement, arguing the country’s need for trained workers after high school and college “has never been higher, nor has the need to ensure that every learner has access to equitable college and career planning resources, guidance, and insights.”
Janet Godwin, ACT chief executive officer
“Partnering in this way will complement and amplify ACT’s proven platform of education and work readiness solutions,” she said.
The partnership and unification will not result in any layoffs, officials said. ACT last summer laid off more than 100 employees and disclosed plans to sell more of the properties on its east Iowa City campus off Scott Boulevard.
ACT hasn’t shared publicly terms of its new partnership with Nexus — including how much funding the investment firm is providing.
Nexus’ March 2024 public disclosure forms, filed with the U.S. government, show it advises for private funds administered in the United States and Cayman Islands, reporting feeder funds organized in the Cayman Islands valued at hundreds of millions.
By integrating ACT’s assessment systems and workforce solutions with Encoura’s data-driven enrollment services, ACT aims to “more precisely connect students and job seekers to institutions of higher education and employers.”
Among its forward-looking intentions, ACT aims to “simplify and streamline the college application process for students and institutions, better match employers with available talent, create new opportunities for upskilling mid- and late-career professionals, help learners identify their strengths and provide recommendations about applying them in education settings and the workplace, and provide more integrated and actionable insights to states, districts, families, and learners.”
In a statement, Nexus co-founder Damian J. Giangiacomo said, “We are excited to partner with ACT’s leadership team in this next chapter of growth to deliver enhanced capabilities for students, school districts, postsecondary institutions, employers, and government stakeholders.”
Nexus’ investment portfolio includes companies including Savvas Learning Company, previously Pearson Education; Toms, a lightweight shoe company; and Sugarbear, a beauty and wellness company.
Proceeds from the partnership, additionally, will fund “the continuation of an Iowa nonprofit organization that will be headquartered in Iowa City.” The nonprofit will conduct programs, services and research focused on education and workplace success, officials said. It also will retain an investment in the new corporation and have representation on ACT’s board.
“ACT will always be driven by our mission, and this investment will allow us to accelerate delivery of impact solutions that are core to who we are — and always have been — including expanding access and opportunity for students,” Godwin said. “As a result of this investment, we will help more students be ready for their postsecondary paths, and help more adults advance in their careers.”
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Upon closing the deal with Nexus Capital Management LP, a Los Angeles private equity firm, ACT and an education data research organization it owns will operate as a “single, unified public benefit corporation.”
Essentially, according to a spokesperson, ACT will become “a type of for-profit company, under the ACT name and brand.”
“This partnership will create more pathways to degrees, credentials, and skills acquisition for people at any stage of their lives,” Daniel A. Domenech, chair of ACT’s board of directors and former executive director of the School Superintendents Association, said in a statement. “The time is right to move into the next phase of ACT’s long-term growth strategy alongside a partner with significant industry expertise, giving ACT the scale and capital necessary to deliver on its promise of education and workplace success.”
As a nonprofit, ACT’s past public filings show budget deficits every year between 2019 and 2022 — with 2023 filings not yet public. Those deficits total $113.5 million, including a loss of $60.6 million in 2020 alone. The last year ACT reported a surplus was in 2018, of $21.3 million.
Encoura unification
Upon closing with Nexus, ACT will fully unify with Encoura — an education data science and research company it acquired in 2018 and since has been operating as a “wholly owned subsidiary of ACT.”
“ACT and Encoura will begin operating as a single, unified public benefit corporation, with ACT’s name and brand, upon close,” an ACT spokesperson said. “The integrated business, known as ACT, will advance the organization’s leadership in education and workforce readiness as it serves the needs of all ACT stakeholders through new investments in ACT’s products and people.”
ADVERTISING
ACT Chief Executive Officer Janet Godwin will continue to lead the new company.
“Our partnership with Nexus Capital Management uniquely positions ACT to meet a watershed moment in our nation, as the demand for talent is growing and becoming more diverse,” Godwin said in a statement, arguing the country’s need for trained workers after high school and college “has never been higher, nor has the need to ensure that every learner has access to equitable college and career planning resources, guidance, and insights.”
“Partnering in this way will complement and amplify ACT’s proven platform of education and work readiness solutions,” she said.
The partnership and unification will not result in any layoffs, officials said. ACT last summer laid off more than 100 employees and disclosed plans to sell more of the properties on its east Iowa City campus off Scott Boulevard.
ACT hasn’t shared publicly terms of its new partnership with Nexus — including how much funding the investment firm is providing.
Nexus’ March 2024 public disclosure forms, filed with the U.S. government, show it advises for private funds administered in the United States and Cayman Islands, reporting feeder funds organized in the Cayman Islands valued at hundreds of millions.
‘Simplify and streamline’
By integrating ACT’s assessment systems and workforce solutions with Encoura’s data-driven enrollment services, ACT aims to “more precisely connect students and job seekers to institutions of higher education and employers.”
Among its forward-looking intentions, ACT aims to “simplify and streamline the college application process for students and institutions, better match employers with available talent, create new opportunities for upskilling mid- and late-career professionals, help learners identify their strengths and provide recommendations about applying them in education settings and the workplace, and provide more integrated and actionable insights to states, districts, families, and learners.”
In a statement, Nexus co-founder Damian J. Giangiacomo said, “We are excited to partner with ACT’s leadership team in this next chapter of growth to deliver enhanced capabilities for students, school districts, postsecondary institutions, employers, and government stakeholders.”
Nexus’ investment portfolio includes companies including Savvas Learning Company, previously Pearson Education; Toms, a lightweight shoe company; and Sugarbear, a beauty and wellness company.
Proceeds from the partnership, additionally, will fund “the continuation of an Iowa nonprofit organization that will be headquartered in Iowa City.” The nonprofit will conduct programs, services and research focused on education and workplace success, officials said. It also will retain an investment in the new corporation and have representation on ACT’s board.
“ACT will always be driven by our mission, and this investment will allow us to accelerate delivery of impact solutions that are core to who we are — and always have been — including expanding access and opportunity for students,” Godwin said. “As a result of this investment, we will help more students be ready for their postsecondary paths, and help more adults advance in their careers.”
ACT, Inc. to become for-profit, with investment firm collaboration
ACT, Inc. — long known for its standardized tests before more recently pursuing a broader mission of research, education, and college and career readiness — this week announced a major collaboration with a large California investment firm, shifting the Iowa City-based ACT from a nonprofit to...
www.thegazette.com
