Education Corporation of America

January 4. 2005
Contact: Lauren B. Sinai


Private Institution Becomes Leading Regional Provider of Post-Secondary Education During Prospect Partners' Five-Year Investment Tenure

CHICAGO, IL.—January 4, 2005: Prospect Partners, LLC announced today that Education Corporation of America (ECA) has recapitalized its business with Willis Stein & Partners, a Chicago-based private equity investment firm that is now the lead investor in ECA, and management led by ECA Chief Executive Officer James Hutton.

Prospect Partners and management formed Education Corporation of America in 1999 to purchase Virginia College, a leading private, accredited for-profit post-secondary educational institution that offers nondegree and associate's, bachelor's and master's degree programs.

The team saw a great opportunity to expand ECA's geographic coverage in the southeastern United States, and focused its strategy on acquiring smaller career schools, introducing new degree programs and making greenfield investments in new markets. ECA is now the leading player in the post-degree career school system market in the southeast. In five years, the company grew from about 1,600 students in two campuses in two cities in Alabama to approximately 6,000 students across nine campuses in six cities in four states. During this time, ECA also introduced more than 35 new technical degree programs across a wide variety of disciplines, including culinary and automotive.

Kenneth C. Horne, who led the company, is retiring as CEO, but will be a shareholder and remain involved as a Director and assist in the growth of the business. James Hutton, who has served as Chief Operating Officer since 1999, will become CEO and remain a shareholder in the new firm, along with members of the management team Jim Tolbert, Diane Clower and Jim Foster.

“We were fortunate to partner with such an experienced management team in Ken and Jim," says Louis W. Kenter, a principal at Prospect Partners. "We developed a great working relationship and built Education Corporation of America into a leading post-secondary school  business. The company is now well-positioned to continue its impressive record of growth and its reputation for delivering high-quality educational services to its students."

Mr. Hutton adds, "Lou and the Prospect team were great partners professionally and personally. Not only did they provide solid support and guidance in our development to date, but they were also a lot of fun to work with."

Banc of America Securities Corporation served as exclusive financial advisor to Prospect Partners and ECA in this transaction.

Prospect Partners will continue to actively pursue investment opportunities in the education market.

Prospect Partners, LLC of Chicago, Illinois is a leading investor in unique lower-middle-market companies, managing two private equity funds totaling $270 million. Since its founding in 1998, Prospect Partners has focused on management-led leveraged acquisitions and has invested in more than 40 leading companies within many niche consumer, commercial, specialty distribution and service markets throughout the United States.

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July 19, 2001
Virginia College Expands to Include Medical Career Center, Inc. at Pensacola, Florida and Mobile, Alabama

April 9, 1999
Education Corporation of America acquires Virginia College