Education Management Corp., a provider of private post-secondary education, said Monday it agreed to be acquired and go private in a $3.4 billion transaction.
Under the terms of the deal, Providence Equity Partners and Goldman Sachs Capital Partners will pay $43 per share cash for the company, a premium of 16 percent to the company's share price Friday and 26 percent above the average closing price of the stock over the past 30 trading days.
The company's board has approved the transaction, which requires shareholder and regulatory approval and which is expected to close this summer.
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.
"This transaction will further enhance the prospects of our education systems," said John R. McKernan, Jr., Education Management's chief executive and vice chairman. "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."
Education Management operates 72 primary campus locations in 24 states and two Canadian provinces.
Paul Salem, senior managing director of private investment firm Providence Equity Partneres said, "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."
Merrill Lynch & Co. and Lazard LLC served as financial advisers to the company.
Goldman Sachs, Credit Suisse and Leeds Equity Partners served as financial advisers to Providence Equity Partners and Goldman Sachs Capital Partners.
