Then There Were 10

Concorde Career Colleges is latest publicly traded for-profit chain taken over by private investors.
June 23, 2006

Three months after two private equity firms announced plans to spend $3.4 billion to buy Education Management Corp., one of the largest publicly held higher education companies, another investor said it would take one of the smallest such companies private.

Concorde Career Colleges, Inc., which operates 12 campuses in seven states and offers  academic and vocational programs in an array of allied health fields, said it had agreed to be purchased by Liberty Partners, a private equity firm in New York that has invested in a range of education businesses, for $114.5 million.

The higher education company will become part of Liberty Higher Education LLC, a subsidiary of Liberty Partners that owns all or part of York Technical Institute, a two-campus college in Pennsylvania; Edison Schools, which manages public schools; and Chartwell Education Group, a consulting group led by Rod Paige, the former U.S. education secretary. Concorde’s chief executive officer, Jack L. Brozman, will stay on to run the company.

Concorde is among the smallest of the major publicly traded companies, of which there will be 10 after it is absorbed by Liberty. The purchase follows March’s announcement that Providence Equity Partners and Goldman Sachs Capital Partners would pay $43 a share to buy Pittsburgh-based Education Management, which operates 72 campuses in 24 states and Canada.

That deal prompted significant speculation about whether it portended a new round of contraction in the for-profit higher education sphere, and whether more publicly traded companies would turn to the private markets.

Thursday’s announcement about Concorde will prime that pump even more, although Jeff Silber, a research analyst at BMO Capital Markets, said there were limits on how many more such transactions there might be. (BMO Capital Markets, formerly Harris Nesbitt, advised Concorde in the deal announced Thursday, although Silber said he did not know anything about the deal until he read about it in a news release this week.)

“There is certainly more speculation than ever about companies being bought,” Silber said, “and we may see more transactions from private equity firms. But we’re seeing a premium being paid for middle-sized companies, and there just are not a lot of companies this size.”

The other 10 college companies that are traded on the three major stock exchanges are: Apollo Group, Career Education Corp., Corinthian Colleges, DeVry, EVCI Career Colleges, ITT Educational Services, Laureate Education,  Lincoln Educational Services, Strayer Education, and Universal Technical Institute.


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