Sylvan Learning Systems Inc. said yesterday that it signed a definitive purchase agreement to acquire 54 percent of the Universidad Europea de Madrid, a for-profit university in Spain, for $51 million.
The Baltimore-based educational services company also said it completed a management agreement allowing it to assume operating control of the university, effective earlier this week.
The acquisition, which was announced in January, should close in the second or third quarter of this year, Douglas L. Becker, the company's president and chief executive, said in a conference call yesterday with analysts and reporters.
Sylvan, one of the world's largest providers of tutoring and other educational services, plans to own and run a network of universities in Europe and Latin America, starting with a controlling interest in UEM, Becker said.
"We think the economics look great and the strategy is on target," he said. "It's possible we could enter one more country this year."
Also, it's likely Sylvan may announce an expansion in Spain, Becker said. "There are some smaller universities that might be acquirable," he said.
Some local governments in Spain also have offered Sylvan land where the company could develop feeder campuses for UEM. In that scenario, students would spend the first two years of their higher education attending a college in their hometown and then transfer to UEM for their last two years, Becker said.
In the past, Sylvan has provided services rather than own schools. It 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.
Sylvan's other divisions offer private tutoring, consulting and testing for academic admissions and professional certification.
Buying foreign universities "is an interesting business opportunity," said Arthur K. Weise, an analyst with Warburg Dillon Read in New York.
"Sylvan is trying to build an education empire, and this is a way to expand its presence in Europe," Weise said.
Shares in Sylvan gained 25 cents to close at $25.1875 on the Nasdaq.
Founded in 1985, UEM has a faculty of 480 and offers 20 degree programs in areas including communications, business, law and health services. The university's enrollment of about 7,200 is double what it was in 1995, when it was allowed to become a full university.
UEM, which is in a suburb of Madrid, is the largest for-profit university in Spain. It had revenue of $50 million for last year.
Pub Date: 4/09/99