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Kaplan acquires Manhattan GMAT

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Kaplan acquires Manhattan GMAT

by chris@knewton » Tue Jan 05, 2010 6:46 pm
Knewton has confirmed the news with multiple sources in both companies and expect an official announcement in the next few weeks. A Kaplan corporate employee even announced the news on Twitter in late December, though the tweet was quickly deleted.

At Knewton, we're interested to see how things pan out, just as we imagine many of you are (both as customers of test prep and as business-minded future MBAs). Will they keep MGMAT as a separate entity, or absorb their operations? Will Kaplan start to integrate MGMAT's teaching content or books? There will be many considerations for how the very different brands and business models will coexist (for example, teaching infrastructure -- one is based on volume and one on a high-pay star system).

So, what do you think? What is the end result for students?
Last edited by chris@knewton on Wed Jan 06, 2010 5:28 pm, edited 1 time in total.
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by IneedtheGMAT » Tue Jan 05, 2010 7:31 pm
Did you really get an 800 on the GMAT? Wow!
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by Osirus@VeritasPrep » Tue Jan 05, 2010 7:39 pm
Well, there goes a great company :(

I hope they leave the books alone at least.
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by DanaJ » Wed Jan 06, 2010 2:02 am
That's some news... Can't say I expected this! MGMAT is hugely successful, so I can't think of any other reason for this sale except that the owner wants to retire early/buy a yacht without a leasing contract...
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by NL48 » Wed Jan 06, 2010 2:51 am
Well, yachts are pretty fun, so it sounds plausible to me ;D.

Although, I wonder what this means for the quality and content of any future releases.
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by Scott@VeritasPrep » Wed Jan 06, 2010 9:03 am
chris@knewton wrote:We've confirmed the news with multiple sources in both companies and expect an official announcement in the next few weeks. A Kaplan corporate employee even announced the news on Twitter in late December, though the tweet was quickly deleted.
LOL... One more way to use social media to lose one's job.

Thanks Chris. We at Veritas Prep heard the same thing a couple of weeks ago, and have been working on confirming it. It will be interesting to see how they manage the two services and the two brands. If quality starts to suffer, it will be difficult for them to justify the acquisition.

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by Jason Moss » Wed Jan 06, 2010 3:17 pm
To all --

Kaplan did acquire Manhattan GMAT, but intends to maintain it as a separate operating entity. Both Kaplan GMAT and Manhattan GMAT will continue to be run independently by their respective pre-acquisition management teams. Students will see no change. Both organizations remain committed to providing students with an outstanding student experience.


Jason Moss
Vice President, Graduate Programs
Kaplan Test Prep and Admissions
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by Andrew Yang » Wed Jan 06, 2010 3:27 pm
At the end of last year, Manhattan GMAT was acquired by Kaplan.

Our founder, Zeke Vanderhoek, has been working on an innovative charter school (www.tepcharter.org) since the beginning of 2007. Zeke's school opened its first 5th grade class this past September, 2009, with Zeke as its principal. For more about TEP, click here:

https://www.nytimes.com/2008/03/07/nyreg ... ref=slogin

Being the owner of a company and the principal of a new charter school are both essentially full-time endeavors, and though Zeke had stepped away from day-to-day operations at MGMAT, he concluded that he couldn't really effectively do both (despite being an obviously very talented guy!). Enter Kaplan.

Kaplan and Manhattan GMAT, despite being competitors in the marketplace, have always held each other in mutual respect. In fact, Kaplan has told us in no uncertain terms, "Keep doing what you're doing!" and wants us to focus on what we're best at - delivering a great educational experience. Accordingly, MGMAT is continuing to operate independently, with the same team, Instructors, and curriculum; we're still working as hard as ever (shameless plug: We have a new advanced math book coming out in the Spring!).

Students should have the same expectations of us that they've always had - we'll be here doing our best to meet and exceed them every day.

Sincerely,

Andrew Yang
President
Manhattan GMAT
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by Jose Ferreira » Thu Jan 07, 2010 6:44 am
Hey Jason,

It sounds as if you're acknowledging that MGMAT's product is better than Kaplan's. ("Kaplan did acquire Manhattan GMAT, but intends to maintain it... Students will see no change.")

Is the plan therefore to keep MGMAT as the premium brand and Kaplan as the middle tier brand? That would explain keeping them separate. How are you going to keep Kaplan GMAT teachers making $20-30/hour happy when their MGMAT brethren are making $100/hr?

It sounds like the famous "Black&Decker/Dewalt" case in business school -- and certainly they merged very successfully while keeping separate identities. I look forward to seeing the results...

Jose
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by pokearound » Sat Jan 09, 2010 7:31 pm
Maybe Manhattan GMAT's high cost is a problem in a down economy, despite its growth. After all, students like me are looking for a quality product at a lower price. Cudos to Knewton for leading the pack.

There is just so much material available on the net for free, for example, on this site. If you are laid off or happen to have more time on your hand to prepare for the GMAT, why paying such a high price to a gmat prep company?! Instead we can re-take the test a few times...

Kaplan's got a great platform. But Manhattan GMAT has a entirely different approach. How possibly will two mesh?! I think some comments in this thread do not make logical sense - maybe the integration will happen soon along with some cost cutting. I am sure during the process students may take the short end of the stick. Otherwise why the acquisition at this timing?! If the business is really doing well and well managed, the owners should keep them running and take a backseat to let the cash roll. Some smell of trouble there...?!

Well, let us take a good look at all available GMAT prep choices now - free, low cost, medium cost and high cost - we should all choose the one with the highest ROI for us individually!

Just my two cents...thanks for listening...
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by Scott@VeritasPrep » Sun Jan 10, 2010 6:30 pm
Jose Ferreira wrote:
It sounds like the famous "Black&Decker/Dewalt" case in business school -- and certainly they merged very successfully while keeping separate identities. I look forward to seeing the results...
This could be. I know Kaplan has a "new course" launching in less than two weeks... Maybe that's the start of the move down market for that brand? Seems very risky to me, but then at least the pieces would seem to fit together.

Scott
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by money9111 » Sun Jan 24, 2010 8:20 pm
Interesting... I had no idea! Hopefully with all of the MBA's floating around the two companies it'll work out for the best! :-)
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by kkrish » Sat Apr 03, 2010 6:16 pm
Gosh! They (MGMAT) should not have succumb to market pressures! The competition between them was helping students and personally I attended a Kaplan free event and dint appreciate it at all!

I hope they maintain their separate path's and don't mix their tutors! MGMAT has a really good website and the analytics are beyond what you can ask for! Their Tutors are , in my personal opinion more effective. This may not be true and I don't want to generalize.
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