IPO planned by parent of Sylvan chain

Educate seeks to raise up to $287.5 million

Move viewed as a plus for city

Second public fling for tutoring centers

May 15, 2004|By Jamie Smith Hopkins | Jamie Smith Hopkins,SUN STAFF

The Sylvan tutoring centers are about to go public - again.

Their Baltimore-based owner, Educate Inc., filed with the Securities and Exchange Commission yesterday to signal its intent to raise up to $287.5 million through an initial public offering. It has not said how many shares it intends to sell.

The well-known Sylvan Learning Center was part of a public company until July, when Sylvan Learning Systems Inc. sold it and several related operations to Educate to focus on running online and foreign universities. That deal totaled approximately $300 million.

Educate spokeswoman Wendy Odell Magus said the company's filing thrusts it into a quiet period, barring officials from commenting on the move. It wants to trade under the ticker symbol EEEE on the Nasdaq stock market.

"The IPO market has been surging back in recent months, and it's good to see a Baltimore company participate," said Anirban Basu, chairman and chief executive of Sage Policy Group Inc., an economic and policy consulting firm in the city. "In the last two or three years, IPOs have just really died on the vine."

Last month, another Baltimore employer, Advertising.com, a Web-based advertising company, also filed an intent to do an IPO.

Firms usually go public because they're planning to expand and need the cash, Basu said. "That can also be a very good sign on the employment front," he said. "Because nobody raises money to shrink."

Educate and Sylvan Learning Systems share the same headquarters - a funky building on Fleet Street in Inner Harbor East - and other reminders of life before the split. Educate's chief executive, R. Christopher Hoehn-Saric, was the co-founder of Sylvan Learning Systems. Douglas L. Becker, chief executive of Sylvan Learning Systems, sits on Educate's board, at no pay.

The IPO won't have an impact on Educate's neighbor, said Sylvan Learning Systems spokesman Chris Symanoskie. "But it's certainly good news for them," he said.

Just over 1,000 Sylvan tutoring centers dot the landscape nationwide, and nearly that many are in Europe under the name Schulerhilfe. The company owns about 20 percent of the centers, and the rest are in the hands of franchisees.

Educate Inc. also owns eSylvan, which provides online tutoring; Catapult Learning, which runs supplemental education programs in schools; and Connections Academy, which operates virtual public schools. The company has said it intends to sell Connections Academy.

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