Md. entrepreneurs hope to score with computerized testing Sylvan/Kee sees future in exams, in-school tutoring

February 14, 1993|By Michael Dresser | Michael Dresser,Staff Writer

You've probably been there. Wasting a beautiful Saturday in a high school cafeteria with hundreds of other sweaty-palmed students, amid scratchy No. 2 pencils and squeaky erasers, taking a test that will determine whether you go to Ivy University or Muddy Flats Community College.

If Douglas L. Becker and Chris Hoehn-Saric have their way, that scene will be abolished by the end of the decade.

Instead, a prospective collegian will go to the nearest Sylvan Learning Center and take the test on a personal computer in a quiet, carpeted room. When the test is over, the score will be available almost immediately.

That's just one of the big changes the two young men at the helm of Columbia-based Sylvan/Kee Systems plan to bring to their company and the world.

Sylvan/Kee and its franchises already generate about $100 million annually from a national chain of about 500 tutoring centers and a computer training business. Mr. Becker and Mr. Hoehn-Saric hope to create a billion-dollar business.

Already, the company has joined the nation's largest publisher of educational tests in a venture that allows students to take the Graduate Record Exam (GRE) and other tests by computer. And Sylvan/Kee is negotiating with the Baltimore school system to put five tutoring centers in public schools -- the first step in what could become a national chain of school-based centers offering remedial education.

Not bad for executives who can't even remember Beatles concerts.

The age of Mr. Becker, 27, and Mr. Hoehn-Saric, 30, raised eyebrows recently when they went to the capital markets to raise $10 million to buy out KinderCare Learning Centers Inc., an Alabama-based national chain that owned half of Sylvan/Kee. To do that, they and their partners in Sterling Capital Ltd. -- Douglas' brother Eric Becker and Steven Taslitz -- had to find investors willing to take a chance on the young management team.

Thomas R. Hitchener, the Alex. Brown & Sons principal who guided them through the private stock placement, said that when prospective investors were told the ages of the management team, they felt it could be a problem. "Once they met Doug and Chris, they never raised that issue again," he said.

Eventually, Allstate Insurance, St. Paul Insurance and the Brown University pension fund joined a group led by Saugatuck Capital Stamford, Conn., as investors in Sylvan/Kee, which completed the deal with KinderCare last month. The investors control between 30 percent to 40 percent of the stock in the privately held company.

Sylvan/Kee is a highly synergistic hybrid of an education-based company, Sylvan Learning Systems, and a computer training company, Kee Systems. In a 1991 merger, Sylvan brought to the table a national chain of learning centers, and Kee brought an expertise in computers and how to use them in teaching.

Now Kee runs many of its programs through computer labs that share facilities with the tutoring centers, while Sylvan uses computers in many of its customized teaching programs. These Sylvan Technology Centers also make it possible to offer computerized testing nationwide.

Mr. Hoehn-Saric holds the title of president of Sylvan/Kee and Kee Systems, and Mr. Becker is president of Sylvan Learning Systems -- not that titles mean a lot at their company. "We're pretty interchangeable across the board," Mr. Hoehn-Saric said.

Both have strong credentials as entrepreneurs. When Mr. Becker was 19 and Mr. Hoehn-Saric was 22, they helped found a firm that created the LifeCard, a wallet-size card with an optical recording strip that could carry the bearer's medical history.

The project attracted the attention of Blue Cross and Blue Shield of Maryland, which formed a joint venture with Mr. Decker and his partners, but bought them out after two years. The partners then bought Kee Systems.

When Kee Systems merged with KinderCare's Sylvan Learning Systems, Mr. Becker and his partners retained operational control but gave up 50 percent of the combined business. They moved Sylvan/Kee's headquarters to Columbia -- andbegan looking for ways to expand.

Potential for growth

Perhaps the greatest potential for growth is educational testing. Last year, Sylvan/Kee launched a joint venture with Educational Testing Service of Princeton, N.J., the nation's largest educational testing company, to develop computerized versions of its tests, which could be administered at Sylvan's network of centers.

So far, the ETS' Graduate Record Exam and National Teachers Exam have gone on-line. The best-known ETS exam, the Scholastic Aptitude Test, could be available at a few Sylvan test sites by late this year. A nationwide computerization of the SATs and an expansion of current centers could take several years, Mr. Becker said, but he has no doubt it can and will be done.

Meanwhile, Sylvan's network has captured the eye of professional groups and other organizations that conduct standardized tests for only a few thousand people a year.

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