Exhibit 99.1
EDUCATION MANAGEMENT CORPORATION ANNOUNCES AGREEMENT TO BE ACQUIRED BY
PROVIDENCE EQUITY PARTNERS AND GOLDMAN SACHS CAPITAL PARTNERS FOR $43 PER
SHARE IN $3.4 BILLION TRANSACTION
PITTSBURGH, March 6 /PRNewswire-FirstCall/ -- Education Management
Corporation (Nasdaq: EDMC), a leading provider of private post-secondary
education, announced the execution of a definitive agreement to be acquired by
Providence Equity Partners and Goldman Sachs Capital Partners in a transaction
valued at approximately $3.4 billion. EDMC's Board of Directors unanimously
approved the transaction and has recommended its approval by the Company's
shareholders.
Under the terms of the merger agreement, the private investors will acquire
all of EDMC's outstanding shares of common stock for $43.00 per share in cash,
representing a premium of 16.3% to the price of EDMC shares as of March 3, 2006,
and a 26.4% premium to EDMC's average closing price of $34.02 during the
previous 30 trading days. The transaction is expected to be completed during the
summer of 2006, subject to the receipt of shareholder approval and regulatory
approvals including the U.S. Department of Education, accrediting agencies and
state licensing boards, as well as satisfaction of customary closing conditions.
Robert B. Knutson, EDMC's Chairman, said, "This transaction offers great
value to our stockholders. Our new partners are world-leading private equity
firms that believe in our commitment to investing in our people, academic
programs, technology and facilities to assure the highest standards of
excellence."
John R. McKernan, Jr., EDMC's Chief Executive Officer and Vice Chairman,
said, "This transaction will further enhance the prospects of our education
systems. Our new financial partners will provide the resources necessary to
realize our full potential and contribute significantly to helping us attain our
long-term strategic vision."
Paul Salem, Senior Managing Director of Providence Equity Partners, said,
"By operating schools that provide a high quality education and meet the
distinctive needs of its students, EDMC has generated consistent revenue and
profit growth for many years. There is significant unmet demand for higher
education in this country and abroad, and EDMC is exceptionally well positioned
to continue to address this compelling market opportunity by further increasing
the number of academic programs, campus locations and online offerings. We look
forward to working with management and our partners to support EDMC's growth as
a private company and to continue its legacy of helping students achieve their
goals."
Adrian Jones, Managing Director at Goldman Sachs Capital Partners, said,
"Goldman Sachs and Providence have a long and successful record of investing
together in growth companies. We have a shared vision of how we can assist
management in EDMC's next phase of growth. We know that the success of our
investment will be dependent on the talents and commitment of EDMC's staff and
faculty, the quality of educational programs, and the professional success of
the graduates."
The transaction will be financed through a combination of equity contributed
by the private equity sponsors and debt financing provided by Credit Suisse,
Goldman Sachs, Merrill Lynch and Bank of America.
Merrill Lynch & Co. served as financial advisor to EDMC and provided a
fairness opinion to the Company's board of directors with regard to the
transaction. Lazard LLC also served as a financial advisor to EDMC and provided
a fairness opinion to the Company's board of directors. Kirkpatrick & Lockhart
Nicholson Graham served as the Company's legal advisor.
Goldman Sachs, Credit Suisse and Leeds Equity Partners served as financial
advisors to Providence Equity Partners and Goldman Sachs Capital Partners.
Simpson Thacher & Bartlett LLP served as their lead legal advisor, assisted by
Fried, Frank, Harris, Shriver & Jacobson LLP and Weil, Gotshal & Manges LLP.
Education Management Corporation (http://www.edmc.com) is among the largest
providers of private post-secondary education in North America, based on student
enrollment and revenue. EDMC has 72 primary campus locations in 24 states and
two Canadian provinces. EDMC's education institutions offer a broad range of
academic programs concentrated in the media arts, design, fashion, culinary
arts, behavioral sciences, health sciences, education, information technology,
legal studies and business fields, culminating in the award of associate's
through doctoral degrees. EDMC has provided career-oriented education for over
40 years.
Providence Equity Partners Inc. is a global private investment firm
specializing in equity investments in media, communications and information
companies around the world. The principals of Providence Equity manage funds
with over $9 billion in equity commitments and have invested in more than 80
companies operating in over 20 countries since the firm's inception in 1990.
Significant investments include Bresnan Broadband Holdings, Casema, Comhem,
eircom, Kabel Deutschland, Metro-Goldwyn-Mayer, Ono, PanAmSat, ProSiebenSat.1,
Recoletos, VoiceStream Wireless, Warner Music Group, and Western Wireless.
Providence Equity is headquartered in Providence, RI and also has offices in New
York and London.
Founded in 1869, Goldman Sachs is one of the oldest and largest investment
banking firms. Goldman Sachs is also a global leader in private corporate equity
and mezzanine investing. Established in 1991, the GS Capital Partners Funds are
part of the firm's Principal Investment Area in the Merchant Banking Division.
Goldman Sachs' Principal Investment Area has formed 11 investment vehicles
aggregating $26 billion of capital to date. Significant investments include:
VoiceStream Wireless, Allied World Assurance, Burger King, SunGard, YES Network,
Western Wireless, Nalco Company, Kabel Deutschland and Coffeyville Resources.
With $8.5 billion in committed capital, GS Capital Partners V is the current
primary investment vehicle for Goldman Sachs to make privately negotiated equity
investments.
Investment Community Conference Call and Webcast
Education Management will host a conference call to discuss the transaction
today at 9:00 a.m. (Eastern Time). Those wishing to participate in the call
should dial 303-262-2083 approximately 10 minutes prior to the start of the
call. A listen-only audio of the conference call will also be broadcast live
over the Internet at http://www.edmc.com. A replay of the call will be available
until March 13, 2006 by dialing (303) 590-3000. The replay passcode is 11055736.
About the Transaction
In connection with the proposed merger, Education Management Corporation
will file a proxy statement with the Securities and Exchange Commission.
INVESTORS AND SECURITY HOLDERS ARE ADVISED TO READ THE PROXY STATEMENT WHEN IT
BECOMES AVAILABLE, BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION. Investors and
security holders may obtain a free copy of the proxy statement (when available)
and other documents filed by EDMC at the Securities and Exchange Commission's
Web site at http://www.sec.gov. The proxy statement and such other documents may
also be obtained for free from EDMC by directing such request to Education
Management Corporation, Attention: Investor Relations, telephone: 412-995-7684.
Statements in this press release that relate to future results and events,
including statements about EDMC's anticipated financial and operating
performance, are forward-looking statements within the meaning of the safe
harbor provision of the Private Securities Litigation Reform Act of 1995. These
statements are subject to risks, uncertainties and assumptions, which change
over time. Forward-looking statements speak only as of the date they are made
and EDMC does not undertake any obligation to update these forward- looking
statements. Actual results could differ materially from those anticipated in the
forward-looking statements, and future results could differ materially from
EDMC's historical performance. Factors that could cause or contribute to such
differences include: general economic, political and industry conditions; EDMC's
effectiveness in its regulatory compliance efforts; the effects of extensive and
changing regulations on EDMC's business; changing market needs and technology;
EDMC's ability to add and integrate new schools and grow its online programs;
increased competition; EDMC's ability to recruit and retain key personnel; and
other matters disclosed in EDMC's Securities and Exchange Commission filings,
including EDMC's Annual Report on Form 10-K.
FOR: Education Management Corporation
Investor Contact:
James Sober, CFA
Vice President, Finance
(412) 995-7684
FOR: Providence Equity Partners
Andrew Cole
Citigate Sard Verbinnen
(212) 687-8080
acole@sardverb.com
FOR: Goldman Sachs Capital Partners
Andrea Raphael
Goldman, Sachs & Co.
Vice President, Media Relations
(212) 357-0025
SOURCE Education Management Corporation
-0- 03/06/2006
/CONTACT: Investor, James Sober, CFA, Vice President, Finance of
Education Management Corporation, +1-412-995-7684; or Andrew Cole of Citigate
Sard Verbinnen for Providence Equity Partners, +1-212-687-8080,
acole@sardverb.com; or Andrea Raphael, Vice President, Media Relations of
Goldman, Sachs & Co. for Goldman Sachs Capital Partners, +1-212-357-0025/
/Web site: http://www.edmc.com /
(EDMC)