Shares of Career Education Corp. (CECO: Quote) surged almost 58 percent in extended trades Thursday after the for-profit education company said it has agreed to sell its European education properties to private equity firm Apax Partners.
Schaumburg, Illinois-based Career Education expects the total consideration for the deal to be $305 million, less certain distributions and adjustments prior to closing of the deal. This includes the distribution to the company of about $18 million from certain subsidiaries within the International segment.
Career Education, which has a market capitalization of $254.92 million, expects to receive a cash payment of $276.5 million at closing.
The transaction includes Career Education's entire International schools segment, comprised of the Paris-based INSEEC Group as well as the International University of Monaco, which provide career-oriented education programs in various disciplines, including business studies, health education, advertising, communications and technology.
Scott Steffey, president and CEO of Career Education said, "Redeploying capital from Europe to the United States is the right move for Career Education. It will help us best serve the vast majority of our students, who are U.S.-based, and return the best value for our investors. The cash from the transaction will improve our options for accelerating future growth."
The European operations of Career Education reported revenue of $128.6 million in 2012, representing about 9 percent of the company's consolidated revenue.
Career Education expects the transaction will close before the end of the year, pending customary provisions, including review by French anti-trust authorities. Morgan Stanley & Co. LLC served as Career Education's exclusive financial advisor in connection with the transaction.
Apax Partners is a leading private equity firm in the French-speaking market. Funds managed and advised by Apax Partners exceed 2.5 billion euros.
CECO closed Thursday's regular trading session at $3.80, up $0.14 or 3.83 percent on a volume of 1.65 million shares. In after-hours, the stock further gained $2.20 or 57.89 percent to $6.00.
by RTT Staff Writer
For comments and feedback: firstname.lastname@example.org