Sylvan Learning Systems Inc., one of the world's largest providers of tutoring and other educational services, is launching plans to own and run a network of universities in Europe and Latin America, starting with a controlling interest in the Universidad Europea de Madrid.
Sylvan said yesterday that it has agreed to buy a 54 percent stake in the private university, which has 7,200 students and is in a suburb of Madrid, for $51 million in cash and debt. The purchase of the largest for-profit university in Spain, for about $28.5 million in cash and $22.5 million in existing debt, requires regulatory approval in Spain, Sylvan said.
Former American University President Joseph Duffey, currently director of the United States Information Agency, will head the new venture.
Sylvan, which in the past has provided services rather than owning schools, hopes to tap into the growing demand among middle-class students for higher education in international markets, where public universities typically lack capacity and restrict access to education.
More than 1.3 million students are pursuing university and advanced degrees outside their home countries, the company said.
The Baltimore-based company chose Spain as its first market "because of its growth, stability and ability to serve as a bridge to both Europe and Latin America," Douglas L. Becker, Sylvan's president and chief executive officer, said yesterday.
Analysts applauded the new strategy, which gives Sylvan a fourth business from which to grow, adding to divisions that offer private tutoring, consulting, and testing for academic admissions and professional certification.
"Potentially this business they're getting into, the post-secondary, university business, for Sylvan could be substantially larger than everything they do currently," said Peter Appert, an education industry analyst with BT Alex. Brown in San Francisco.
The opportunity to start such a venture in the United States "pales in comparison to the opportunity overseas in terms of the scale of the market and how under-penetrated it is vs. the U.S. market," Appert said. In Spain, for instance, "more kids want to go to college than there are seats in traditional colleges."
Pub Date: 1/21/99