According to Forbes, the ACT will be spun off into a for-profit company. That for-profit company will be majority owned by Nexus Capital Management, a private equity firm. ACT’s current CEO will serve as CEO of the new company.

The non-profit ACT organization will continue on as a sort of hub for research. Or something. Probably under a different name. It will retain a minority interest in the test.

The ACT was created by researchers at the University of Iowa in 1959, and the non-profit that administers it was created in 1966.  For an amusing account of how petiness from ETS and Henry Chauncey led to the creation of this test, check out Norbert Elliot’s biography of Chauncey, Henry Chauncey: An American Life.

This comes as a surprise, but it isn’t an entirely new idea. Regular readers will already know that in the 1990s ETS spun off a bunch of its tests into a for-profit subsidiary which was later sold to Thomson. And British Council recently sold its IELTS interests in India to the for-profit IDP.  ETS’s move helped save that firm from bankruptcy.  British Council’s move looks to have been a smart one, as the language testing industry is increasingly competitive.

We will probably see more of this in the future.

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