Sterling, Citigroup in education take-private

Along with members of the company’s management team, the two firms have agreed to buy Nasdaq-traded Educate in a deal worth $545m. It is Citigroup’s and Sterling’s second education-related deal announced today.

Sterling Capital Partners and Citigroup Private Equity have agreed to acquire Educate, a provider of supplemental education products to students in pre-Kindergarten through 12th grade, for approximately $545 million (€421 million). 

The company’s chairman and chief executive officer, Christoper Hoehn-Saric, and its president and chief operating officer, Peter Cohen, are also participating in the privatisation, Educate said in a statement.
Shareholders will receive $8 in cash per share. The deal is expected to close in the second quarter of 2007. 
Currently trading on the Nasdaq under the ticker symbol EEEE, Educate includes the American tutoring service business Sylvan Learning and the reading, math and study skills programs provided by Hooked on Phonics. It also includes Catapult Learning, an educational services provider to public and private schools. 
Baltimore, Maryland- and Chicago-based Sterling Capital has made other investments in the for-profit education sector. It backed the nationwide expansion of Florida Coastal School of Law, one of only two for-profit US law schools to receive full accreditation from the American Bar Association, in January of 2004. 
Citigroup Private Equity is the private equity arm of the US financial services giant Citigroup. The firm closed its second fund, Citigroup Capital Partners II, at $3.3 billion in December. It will use the fund to invest in partnership deals with buyout firms.

Citigroup Private Equity and Sterling took part in another for-profit deal today. In conjunction with Kohlberg Kravis Roberts, SAC Capital Management, SPG Partners, Bregal Investments, Caisse de dépôt et placement du Québec, Makena Capital, Torreal SA and Southern Cross Capital, the firm bought international higher education-provider Laureate Education for approximately $3.8 billion. The company’s chairman and chief executive officer, Douglas Becker, also took part in the deal. Shareholders will receive $60.50 in cash per share.