Laureate Education Inc. said Monday that it has agreed to go private for $3.82 billion in cash from a group led by the higher education company's Chairman and Chief Executive Douglas Becker.
The sweetened offer of $62 per share tops the investor group's earlier bid of $60.50 per share, a deal that some of Laureate's major investors said was too low. A tender offer for Laureate's shares is scheduled to begin on Friday.
Baltimore-based Laureate, formerly known as Sylvan Learning Systems Inc., is a for-profit higher education company with 24 accredited institutions, and 240,000 students in 15 countries. It includes online schools such as Walden University and universities in places such as Chile, Switzerland and China.
Laureate's board unanimously accepted the latest offer, which represents a 26 percent premium over the company's closing stock price on Jan. 4, the day before a special committee of independent directors of Laureate's board authorized advisers to start negotiations on a definitive acquisition.
Shares of Laureate Education rose $1.38, or 2.3 percent, to $61.49 in midday trading.
The investor group includes Kohlberg Kravis Roberts & Co., Citi Private Equity, S.A.C. Capital Management LLC, SPG Partners, Bregal Investments, Caisse de depot et placement du Quebec, Sterling Capital, Makena Capital, Torreal SA and Brenthurst Funds.
Becker and director R. Christopher Hoehn-Saric, along with certain other affiliates of Sterling Capital, have agreed to accept the original per share offer price in connection with the rollover of their shares in the transaction.
The deal, however, could face problems from some of Laureate's larger shareholders. Three investors - T. Rowe Price, Select Equity Group Inc. and BlackRock Inc. - all expressed doubts about the earlier $60.50 per share offer.
Laureate has forecast earnings of $5.00 per share by 2010, which T. Rowe Price said could lead to a doubling of Laureate's share price to $110 over the next three years.
The three investors also said they were concerned about potential conflicts of interest, saying it put Becker in the position of trying to seek the lowest price as a buyer while ostensibly trying to maximize value for shareholders.
Becker has been CEO and chairman since 2000.