UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 26, 2001
Education Management Corporation
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(Exact name of registrant as specified in its charter)
Pennsylvania 000-21363 25-1119571
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
300 Sixth Avenue, Suite 800, Pittsburgh, PA 15222
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (412) 562-0900
Page 1 of 5 pages.
Index begins on page 5.
Item 2. Acquisition or Disposition of Assets.
On September 27, 2001, Education Management Corporation ("EDMC") announced
that it had closed in escrow its purchase of 4.9 million shares (the "Shares")
of Class A Common Stock, $.01 par value per share ("Common Stock"), of Argosy
Education Group, Inc. ("Argosy"), pursuant to the terms and conditions of the
Stock Purchase Agreement dated July 9, 2001 (the "Stock Purchase Agreement") and
the Joinder Agreement dated September 26, 2001. The Shares were beneficially
owned by Michael C. Markovitz ("Dr. Markovitz"), Argosy's chairman and chief
executive officer. The aggregate cash purchase price for the Shares, which
represent approximately 75% of the outstanding shares of Common Stock of Argosy,
was $58.8 million. The Shares and the purchase price will be released from
escrow to the respective parties upon the satisfaction of certain conditions,
including regulatory approvals and the approval by Argosy's shareholders of a
previously announced merger agreement among Argosy, EDMC and a wholly-owned
subsidiary of EDMC (the "Merger Agreement"). The purchase price for the Shares
was determined in arms' length negotiations. Under certain circumstances the
Stock Purchase Agreement may be rescinded in accordance with its terms.
Argosy is a for-profit provider of doctoral level and other educational
programs. Under the terms of the Merger Agreement, EDMC had the ability to
cause Argosy to dispose of either or both of John Marshall Law School ("JMLS")
and PrimeTech Canada, Inc. ("PrimeTech"), two operations that have been
incurring operating losses, and EDMC has directed Argosy to dispose of each of
these operations. Dr. Markovitz has agreed to be a standby purchaser of the
stock of JMLS and/or PrimeTech upon receiving notice from Argosy to do so. Apart
from these operations, EDMC intends to continue Argosy's programs after
consummation of the merger pursuant to the Merger Agreement.
EDMC funded the stock purchase through a letter of credit under its credit
facility with National City Bank as agent for a syndicate of lenders.
Argosy has called a Special Meeting of Stockholders to be held on October
31, 2001 to request stockholder approval of the Merger Agreement and the
transactions contemplated thereby. If the merger is approved by Argosy's
stockholders and receives required regulatory approvals, and upon the
satisfaction or waiver of certain other closing conditions, Argosy stockholders
(except generally as described in the following sentence) will be entitled to
receive $12.00 in cash for each outstanding share of Common Stock held
immediately prior to the effective time of the merger. The Shares acquired by
EDMC pursuant to the Stock Purchase Agreement and treasury shares held by Argosy
will be cancelled and extinguished immediately prior to the effective time of
the merger and there will be no merger consideration payable on such Shares.
Pursuant to the terms of the Stock Purchase Agreement and prior to selling
the Shares to EDMC, all of the Shares beneficially owned by Dr. Markovitz were
voted in favor of the Merger Agreement and the transactions contemplated
thereby, including the merger. Dr. Markovitz also granted an irrevocable proxy
to EDMC, the effect of which is that in the event that the Stock Purchase
Agreement is rescinded by its terms, Dr. Markovitz has agreed to vote the Shares
Page 2 of 5 pages.
against any action or agreement that would impede, interfere with, delay,
postpone or discourage the Merger, including any other acquisition proposal.
Item 7. Financial Statements and Exhibits
(a) - (b). Financial Statements and Pro Forma Financial Information.
In accordance with the instructions in Item 7(a)(4) and (b)(2), the
historical financial statements of Argosy and the pro forma financial
information required by Item 7 have not been filed herewith, but will be filed
not later than 60 days after the initial due date of this report.
(c). Exhibits
Exhibit
Number Description
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2.1 Stock Purchase Agreement dated July 9, 2001, by and between Education
Management Corporation and Michael C. Markovitz (incorporated herein by
reference to Exhibit 2.2 to the Quarterly Report on Form 10-Q filed by
Argosy Education Group, Inc. filed for the quarterly period ended May
31, 2001).
2.2 Joinder Agreement dated September 26, 2001, by and between Education
Management Corporation, Michael C. Markovitz, The MCM Trust and the
Michael C. Markovitz Dynastic Trust (incorporated herein by reference
to Exhibit 2.2 to the Current Report on Form 8-K filed by Argosy
Education Group, Inc. to report an event dated September 26, 2001).
2.3 Agreement and Plan of Merger dated July 9, 2001, among Argosy Education
Group, Inc., Education Management Corporation and HAC Inc.
(incorporated herein by reference to Exhibit 2.1 of Argosy Education
Group, Inc.'s Quarterly Report on Form 10-Q filed for the quarterly
period ended May 31, 2001).
2.4 Irrevocable Proxy and Power of Attorney given by Dr. Markovitz to
Education Management Corporation (incorporated herein by reference to
Exhibit 6 of Education Management Corporation's Schedule 13D filed on
October 9, 2001 with respect to Argosy Education Group, Inc. Class A
Common Stock).
Page 3 of 5 pages.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
EDUCATION MANAGEMENT CORPORATION
/s/ Robert T. McDowell
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By: Robert T. McDowell
Its: Executive Vice President
and Chief Financial Officer
Date: October 10, 2001
Page 4 of 5 pages.
EDUCATION MANAGEMENT CORPORATION
INDEX TO EXHIBITS
Exhibit
Number Description
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2.1 Stock Purchase Agreement dated July 9, 2001, by and between Education
Management Corporation and Michael C. Markovitz (incorporated herein by
reference to Exhibit 2.2 to the Quarterly Report on Form 10-Q filed by
Argosy Education Group, Inc. for the quarterly period ended May 31,
2001).
2.2 Joinder Agreement dated September 26, 2001, by and between Education
Management Corporation, Michael C. Markovitz, The MCM Trust and the
Michael C. Markovitz Dynastic Trust (incorporated herein by reference
to Exhibit 2.2 to the Current Report on Form 8-K filed by Argosy
Education Group, Inc. to report an event dated September 26, 2001).
2.3 Agreement and Plan of Merger dated July 9, 2001, among Argosy Education
Group, Inc., Education Management Corporation and HAC Inc.
(incorporated herein by reference to Exhibit 2.1 of Argosy Education
Group, Inc.'s Quarterly Report on Form 10-Q filed for the quarterly
period ended May 31, 2001).
2.4 Irrevocable Proxy and Power of Attorney given by Dr. Markovitz to
Education Management Corporation (incorporated herein by reference to
Exhibit 6 of Education Management Corporation's Schedule 13D filed on
October 9, 2001 with respect to Argosy Education Group, Inc. Class A
Common Stock).
Page 5 of 5 pages.