PROSPECT PARTNERS COMPLETES
RECAPITALIZATION OF EDUCATION CORPORATION OF AMERICA; WITH MANAGEMENT,
RETAINS MINORITY STAKE IN THE BUSINESS
Private Institution Becomes Leading Regional Provider of Post-Secondary
Education During Prospect Partners' Five-Year Investment Tenure
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
“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
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.