Exhibit 99.2
CAREER EDUCATION CORPORATION
AND EDUTREK INTERNATIONAL, INC.
SIGN DEFINITIVE MERGER AGREEMENT
CECO to Expand Global Presence, Launch University Division
Hoffman Estates, Ill. and Atlanta, Ga., (October 24, 2000) - Career
Education Corporation (NASDAQ: CECO) and EduTrek International, Inc. (OTC BB:
EDUT) today announced they have signed a definitive merger agreement under which
Career Education Corporation will acquire all of the shares of EduTrek. The
transaction will significantly enhance CEC's position as one of the world's
largest quality providers of private, for-profit postsecondary education.
Under the terms of the agreement, EduTrek's shareholders will receive an
aggregate of 1.2 million shares of Career Education Corporation stock
(approximately 0.09 shares of CEC stock for each share of EduTrek stock) and
$2.5 million in cash (approximately $0.19 per share). There are approximately
13.32 million EduTrek shares outstanding. Career Education Corporation also
will fund approximately $37.0 million in assumed EduTrek debt and other
obligations.
The transaction is expected to close late in the fourth quarter of 2000 or
in the first quarter of 2001. Completion of the acquisition is subject to a
number of conditions, including regulatory and EduTrek shareholder approvals.
Steve Bostic, chairman and chief executive officer of EduTrek International,
Inc., and another major shareholder have each agreed to vote their EduTrek
shares in favor of the merger, which shares represent over 90% of the votes
available.
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CECO/EDUT SIGN MERGER AGREEMENT...2
EduTrek owns and operates American InterContinental University (AIU).
Founded in 1970, AIU has seven campuses located in Atlanta (Buckhead and
Dunwoody), Dubai, Ft. Lauderdale, London, Los Angeles and Washington D.C., with
approximately 4,500 students. The University is accredited by the Commission on
Colleges of the Southern Association of Colleges and Schools (SACS).
"Career Education Corporation and American InterContinental University are
an ideal strategic combination," said John M. Larson, chairman, president and
chief executive officer of Career Education Corporation. "AIU is an outstanding
university system primarily delivering bachelor's and master's degrees in three
of the four core curricula CEC offers, including visual communication and design
technologies, information technology and business studies. The acquisition of
AIU opens new opportunities for CEC to offer a wider range of degree options to
meet the needs of a broader student population.
"AIU also will expand CEC's geographic presence to include several new
major markets in the United States, and will extend our international reach
beyond Canada to the United Kingdom and United Arab Emirates. With CEC's 30
campuses and AIU's seven campuses, we will have a significant presence in the
markets where the new economy is driving increasing demand for the type of
career training we provide," Mr. Larson said.
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CECO/EDUT SIGN MERGER AGREEMENT...3
"I am pleased that AIU will be part of the CEC family," said Steve Bostic,
chairman and chief executive officer of EduTrek International, Inc. "Career
Education Corporation has a proven track record of acquiring top academic
institutions and fostering growth through investments in curricula, staff,
student services, facilities and marketing programs. AIU will advance its
mission to serve the higher education needs of traditional students, working
adults and international students."
AIU offers a variety of international study programs, including a Study
Abroad Program. During 1999, more than 800 students from universities across
the U.S. earned academic credit from their home university by enrolling at AIU's
London and Dubai campuses.
"EduTrek has a number of strategic assets that will help accelerate CEC's
growth," Mr. Larson said. "We plan to apply the same approach that has proved
successful at every school we have acquired to date - investing in growth
opportunities while creating operating efficiencies through economies of scale -
to realize the full potential inherent in the AIU franchise."
According to Mr. Larson, CEC plans to establish a University Division,
under which AIU will operate. "There are numerous growth opportunities for AIU,
including expansion into new geographic markets, the referral of current CEC
students and graduates to AIU's advanced degree programs, and the introduction
of distance learning," he said.
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CECO/EDUT SIGN MERGER AGREEMENT...4
The transaction is expected to be tax-free to both companies and their
respective shareholders, except for the cash consideration which may be taxable
to EduTrek's shareholders. The transaction will be accounted for under the
purchase method of accounting. CEC remains confident that it will be able to
meet or exceed current consensus analyst estimates for earnings per share even
though the transaction will be dilutive to CEC in 2001. Earnings per share
attributable to the merger are expected to become accretive in 2002. Career
Education Corporation used Credit Suisse First Boston Corporation as a financial
advisor for the merger. EduTrek International, Inc. used The Robinson-Humphrey
Company, LLC as a financial advisor for the merger.
Career Education Corporation will host a conference call with financial
analysts on Wednesday, October 25, 2000 at 10:00 a.m. (Eastern Daylight Time) to
discuss the EduTrek merger. Interested parties can listen to the conference
call live through the Internet at www.vcall.com, or by calling (913) 981-4911.
Following the conference call, a rebroadcast will be available for 90 days at
www.vcall.com, or for seven days by calling (719) 457-0820 and citing
confirmation code 730269.
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CECO/EDUT SIGN MERGER AGREEMENT...5
Career Education Corporation is one of the largest providers of private,
for-profit, postsecondary education in North America. The Company currently
operates 30 campuses in 15 states and two Canadian provinces. CEC schools enjoy
long operating histories and offer a wide variety of bachelor's degree,
associate degree and diploma programs in career-oriented disciplines within the
Company's core curricula of visual communication and design technologies,
information technology, business studies and culinary arts.
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Additional Information:
Except for the historical and present factual information contained herein,
the matters set forth in this release, including statements as to the expected
date of the closing of the merger, future financial and operating results,
expected benefits and synergies of the merger, tax and accounting treatment of
the merger, future opportunities and any other effect, result or aspect of the
proposed transaction and any other statements identified by words such as
"expects," "projects," "plans," and similar expressions are forward-looking
statements within the meaning of the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995. Such statements involve risks and
uncertainties, including, but not limited to, costs and difficulties related to
the integration of acquired businesses, costs, delays, and any other
difficulties related to the merger, failure of the parties to satisfy closing
conditions, risks and effects of legal and administrative proceedings and
governmental regulations, future financial and operational results, competition,
general economic conditions, ability to manage and continue growth, risks of
international operations and other risk factors relating to our industry as
detailed from time to time in each of Career Education Corporation's and
EduTrek's reports filed with the SEC.
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CECO/EDUT SIGN MERGER AGREEMENT...6
Career Education Corporation and EduTrek disclaim any responsibility to
update these forward-looking statements.
Career Education Corporation will file a prospectus and other relevant
documents concerning the proposed merger transaction with the SEC. EduTrek will
file a proxy statement and other documents concerning the proposed merger
transaction with the SEC. Investors are urged to read the proxy statement and
the prospectus when they become available and any other relevant documents filed
with the SEC because they will contain important information. You will be able
to obtain the documents free of charge at the website maintained by the SEC at
www.sec.gov. In addition, you may obtain documents filed with the SEC by Career
Education Corporation free of charge by requesting them in writing from Career
Education Corporation, 2895 Greenspoint Parkway, Suite 600 Hoffman Estates,
Illinois 60195 Attention: Investor Relations Department, or by telephone at
(847) 585-3899. You may obtain documents filed with the SEC by EduTrek free of
charge by requesting them in writing from EduTrek International, Inc., 6600
Peachtree-Dunwoody Road, Embassy Row 500 Atlanta, Georgia 30328 Attention:
Office of Corporate Secretary, or by telephone at (404) 965-8000.
EduTrek, and its directors and executive officers may be deemed to be
participants in the solicitation of proxies from the stockholders of EduTrek in
connection with the merger. Information about the directors and executive
officers of EduTrek and their ownership of EduTrek stock is set forth in the
proxy statement for EduTrek's 2000 annual meeting of stockholders. Investors
may obtain additional information regarding
the interests of such participants by reading the proxy statement and the
prospectus when they become available.
Investors should read the proxy statement and the prospectus carefully when
they become available before making any voting or investment decisions.