University | 9:19 am | August 6, 2012 | By Ben Prawdzik

Higher One looks for buyer

Sean Glass '03, pictured in 2002, was a co-founder of the Yale Entrepreneurial Society while at Yale. A decade later, the entrepreneurial venture he started with two other Yalies is valued at hundreds of millions of dollars.
Sean Glass '03, pictured in 2002, was a co-founder of the Yale Entrepreneurial Society while at Yale. A decade later, the entrepreneurial venture he started with two other Yalies is valued at hundreds of millions of dollars. Photo by YDN.

Higher One, the New Haven-based higher education financial services company founded by three Yalies, is searching for a buyer to purchase the business, Bloomberg News reported.

With a market value just over $600 million, Higher One has partnered with investment firm Goldman Sachs to screen potential buyers. Shares of Higher One climbed 22 percent over last week and currently trade at $11.83 per share.

Higher One serves approximately 6.2 million students at over 800 campuses. The company offers online banking and debit card services for students and assists schools in issuing bills and processing payments.

While Higher One has been quiet about its search, regulatory scrutiny in May caused at least one potential buyer to end talks with the company, Bloomberg reported.

In May, a report by the U.S. Public Interest Research Group (PIRG) said campus debit card companies sometimes charge “unnecessary and unfair” fees while using “aggressive” marketing tactics. The report highlighted Higher One’s role in handling customers who receive federal financial aid, and Democratic lawmakers asked the Department of Education and the Consumer Financial Protection Bureau in June to investigate PIRG’s findings.

New York-based private equity firm Lightyear Capital is Higher One’s largest shareholder. According to regulatory filings, the firm owns a stake of over 25 percent due to a $75 million investment in 2008.

Comments