p> BALTIMORE--(BUSINESS WIRE)--Aug. 18, 2006--Laureate Education, Inc. (NASDAQ:LAUR) announced that it signed a binding agreement with its business partner in Chile (INDECO S.A.) to satisfy all remaining earnout obligations related to the acquisition of its Chilean businesses.
In conjunction with this agreement, Laureate Education has agreed to acquire the remaining 20% interest in its Chilean businesses, which include a subsidiary in Ecuador. The purchase of the remaining interest would have otherwise taken place in 2009. These transactions are expected to close within 60 days and will be completed in exchange for a total settlement of $161 million.
Douglas Becker, Chairman and Chief Executive Officer of Laureate Education stated, "This transaction recognizes the tremendous value that has been created since the year 2000 - the time of our initial entry in Chile. Our partners have worked tirelessly with us to build and expand our businesses in Chile and Ecuador. This entailed extensive investment in real estate, student financing, marketing and new program development. The results generated by these investments have been impressive."
"Our full ownership will further enable us to expand and optimize our Chilean businesses, creating new opportunities for faculty, staff, and students," added Mr. Becker.
The Company also announced that it has entered into an agreement with a group of banks for a $250 million revolving credit facility that has a 5-year term and a LIBOR-based interest rate. This credit facility has an expansion feature of an additional $100 million. The Company's existing $120 million facility was canceled in conjunction with the closing of the new credit facility.
The expected use of proceeds includes acquisitions (including the purchase of minority interests), refinancing existing debt and partial funding of the Chilean transaction. Rosemarie Mecca, Executive Vice President and Chief Financial Officer stated, "This new credit facility, with its attractive terms and favorable pricing, is a component of our strong financial outlook and long-term operating strategy of expanding existing locations, opening new campuses and entering new markets."
Additionally, Laureate announced that it expects to close additional credit facilities of approximately $55 million (USD) related to its Mexico subsidiaries to be used primarily for acquisitions and new campuses.
Today's announcements are not expected to change the Company's 2006 or 2007 earnings per share outlook and are consistent with Laureate's five-year plan that calls for 25% average annual growth in earnings per share between 2006 and 2010. Earnings related to the acquisition of minority interest will partially fund additional investment in marketing, sales and program development in Chile, Ecuador and in other key Laureate markets.
Forward Looking Statements
This release includes information that could constitute forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Any such forward-looking statements may involve risk and uncertainties. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, the Company's actual results could differ materially from those described in the forward-looking statements.
The following factors might cause such a difference:
- The Company's operations can be materially affected by competition in its target markets and by overall market conditions, among other factors.
- The Company's foreign operations, in particular, are subject to political, economic, legal, regulatory and currency-related risks.
Additional information regarding these risk factors and uncertainties is detailed from time to time in the Company's filings with the Securities and Exchange Commission, including but not limited to our most recent Forms 10-K and 10-Q, available for viewing on our website. (To access this information on our website, please click on "Investor Relations," "SEC Filings".)