Transaction Valued at Approximately $3.8 Billion
BALTIMORE--(BUSINESS WIRE)--Jan. 28, 2007--Laureate Education,
Inc. (NASDAQ: LAUR), the world's leading international provider of
higher education, today announced that it has entered into a
definitive agreement under which an investor group will acquire
Laureate in an all cash transaction for $60.50 per share, or an
aggregate value of approximately $3.8 billion. The investor group is
led by Douglas L. Becker, Chairman and Chief Executive Officer of
Laureate, and consists of a consortium including Kohlberg Kravis
Roberts & Co. (KKR); Citigroup Private Equity; S.A.C. Capital
Management, LLC; SPG Partners; Bregal Investments; Caisse de depot et
placement du Quebec; Sterling Capital; Makena Capital; Torreal S.A.;
and Southern Cross Capital.
A Special Committee of independent directors of the Laureate Board
of Directors recommended the transaction to Laureate's Board. The
Special Committee believed that it was maximizing shareholder value by
selling Laureate now at a significant and attractive valuation
multiple. The Board unanimously approved the transaction. The
transaction is expected to close at the end of the second quarter of
2007, subject to shareholder approval and approval under the
Hart-Scott-Rodino Act, as well as the satisfaction of customary
closing conditions for transactions of this type.
Mr. Becker said: "Laureate is a leader in the international higher
education market and I am very proud of the company we have built.
Every day, around the world, 25,000 Laureate employees eagerly help
over 240,000 students realize their potential, prepare for successful
careers and achieve their dreams. I am pleased to say that our new
investors share this passion.
"We see many exciting opportunities ahead for Laureate and we
fully intend to keep operating the company as we have in the past. We
will remain headquartered in Baltimore and our valued senior
management team will be asked to stay on board. We also will continue
to provide the same high quality level of service and the wide range
of programs our students have come to expect."
Mr. Becker first approached Laureate's Board with a conditional
proposal in September 2006. At that time, consistent with its
fiduciary responsibilities, the Board formed a Special Committee of
independent directors to consider Mr. Becker's proposal and to
determine whether to enter into discussions with him. After engaging
independent financial and legal advisors, the Special Committee
authorized Mr. Becker to begin discussions with other potential
financial partners to secure a higher offer.
Subsequently, Mr. Becker presented three other offers to the Board
before the Special Committee recommended, and the Board accepted, the
$60.50 per share proposal, which represented a premium of 23% over the
closing price of Laureate's common stock on Thursday, January 4, 2007,
the day before the Special Committee authorized its advisors to begin
negotiation of a definitive agreement at a price of $60.50 per share.
The $60.50 per share represents a multiple of 33.8x Laureate's
trailing 12 months earnings per share from continuing operations as of
September 30, 2006, and a premium of almost 20% over the last 30-day
average closing prices of Laureate common stock.
Mr. Becker added: "I am very pleased to be joined by an
outstanding group of investors, many of whom I have known and worked
with in the past. These investors are known for partnering with
management to help build and grow businesses with sustainable value -
they possess extensive international experience, share a long-term
view and are capable of investing substantial additional resources."
The agreement includes a "go shop" provision, allowing the Special
Committee to solicit, receive and evaluate superior proposals over the
next 45 days with cooperation from Mr. Becker and Laureate management.
In accordance with the agreement, the Special Committee, with the
assistance of its independent advisors, intends to actively solicit
superior proposals during this period. There is no assurance that the
"go shop" provision will result in a higher offer. Laureate and the
Special Committee do not intend to disclose developments with respect
to the solicitation process unless and until the Special Committee and
the Board have made a decision.
The equity investment for the transaction will be contributed by
the investors, including Mr. Becker, and debt financing will be
provided by Citigroup Corporate and Investment Banking and Goldman
Sachs. Morgan Stanley and Merrill Lynch & Co. served as financial
advisors to the Special Committee of Laureate's Board and provided
fairness opinions to the Special Committee. Pillsbury Winthrop Shaw
Pittman LLP served as the Special Committee's legal advisor and DLA
Piper US LLP served as legal advisor to Laureate. Citigroup Corporate
and Investment Banking and Goldman Sachs served as financial advisors
to Mr. Becker and the investor group and Simpson Thacher & Bartlett
LLP and Katten Muchin Rosenman LLP provided legal counsel.
About Laureate Education, Inc.
Laureate Education, Inc. (NASDAQ: LAUR) is focused on providing a
superior university experience to over 240,000 students through the
leading global network of accredited campus-based and online
universities. Addressing the rapidly growing global demand for higher
education, Laureate offers a broad range of career-oriented
undergraduate and graduate programs through campus-based universities
located in Latin America, Europe, and Asia. Through online
universities, Laureate offers the growing population of
non-traditional, working-adult students the convenience and
flexibility of distance learning to pursue undergraduate, master's and
doctorate degree programs in major career fields including
engineering, education, business, and healthcare. For more
information, please visit our website, www.laureate-inc.com.
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
Certain additional factors could affect the outcome of the matters
described in this press release. These factors include, but are not
limited to, (1) the occurrence of any event, change or other
circumstances that could give rise to the termination of the merger
agreement; (2) the outcome of any legal proceedings that may be
instituted against Laureate and others following announcement of the
merger agreement; (3) the inability to complete the merger due to the
failure to obtain stockholder approval or the failure to satisfy other
conditions to completion of the merger, including the receipt of
stockholder approval and expiration of the waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976; (4) the failure
to obtain the necessary debt financing arrangements set forth in
commitment letters received in connection with the merger; (5) risks
that the proposed transaction disrupts current plans and operations
and the potential difficulties in employee retention as a result of
the merger; (6) the ability to recognize the benefits of the merger;
(7) the amount of the costs, fees, expenses and charges related to the
merger and the actual terms of certain financings that will be
obtained for the merger; and (8) the impact of the substantial
indebtedness incurred to finance the consummation of the merger. Many
of the factors that will determine the outcome of the subject matter
of this press release are beyond Laureate's ability to control or
predict. Laureate undertakes no obligation to revise or update any
forward-looking statements, or to make any other forward-looking
statements, whether as a result of new information, future events or
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/A and 10-Q, available for viewing on our
website. (To access this information on our website,
www.laureate-inc.com, please click on "Investor Relations", "SEC
Important Additional Information Will Be Filed With the SEC
In connection with the proposed merger agreement, Laureate will
file a proxy statement with the Securities and Exchange Commission.
Investors and security holders are advised to read the proxy statement
when it becomes available, because it will contain important
information about the merger and the parties thereto. Investors and
security holders may obtain a free copy of the proxy statement (when
available) and other documents filed by Laureate at the Securities and
Exchange Commission's Web site at http://www.sec.gov. The proxy
statement and such other documents may also be obtained for free from
Laureate by directing such request to Laureate Education, Inc., Office
of Investor Relations, 1001 Fleet Street, Baltimore, Maryland 21202,
telephone (410) 843-6394.
Laureate and its directors, executive officers and other members
of its management and employees may be deemed to be participants in
the solicitation of proxies from its stockholders in connection with
the proposed merger. Information concerning the interests of
Laureate's participants in the solicitation, which may be different
than those of Laureate stockholders generally, is set forth in
Laureate's proxy statements and Annual Reports on Form 10-K,
previously filed with the Securities and Exchange Commission, and in
the proxy statement relating to the merger when it becomes available.