Education Management Corp. Success Reflected in Plan to Hire Hundreds
Olson, Thomas, Tribune-Review/Pittsburgh Tribune-Review
Underneath her tassel and mortarboard, Venus Williams beams from a photo on Education Management Corp.'s Web site.
The tennis star earned a fashion design degree between matches at the U.S. Open and Wimbledon in 2007 from the Downtown company's school in Fort Lauderdale -- one of the 93 post-secondary schools it operates in North America.
While hardly a celebrity in its hometown, Education Management is now about to go on a hiring and spending spree. It plans to add 600 employees in Allegheny County over the next three years, a 20 percent increase in its local work rolls.
Plus, the corporation is poised to spend $30 million on local construction projects that include a new data center, most likely in Robinson. Education Management will expand its headquarters Downtown, as well as its online education center in the Strip District, a rapidly growing learning channel for the company.
"They are a well-run, ambitious enterprise," said Richard Garrett, senior research analyst at Eduventures, a higher-education research and consulting firm based in Boston.
In 2010, Education Management plans to open between eight and 10 new school locations, according to securities documents. By comparison, it has opened 21 locations since mid-2006.
Helping fund such expansion was a public stock offering in early October that raised $385 million from selling 23 million shares, the company said.
The stock offering was the second time Education Management has become a publicly owned company. It first went public in 1996, raising $46 million. Ten years later, the company became privately owned again in a $3.4 billion buyout co-led by Goldman Sachs Capital Partners.
In exchange for pledging to hire 600 workers and retaining its existing 2,800, Education Management is getting $6 million in government incentives. Pennsylvania is providing $5.75 million in job-creation tax cuts, opportunity grants and infrastructure assistance. Allegheny County is contributing $250,000 in community- development block grants and job training assistance.
Neither Education Management CEO Todd Nelson nor President Edward West was available for comment.
Hired as CEO in early 2007, Nelson spent 20 years as an executive of Apollo Group Inc., Education Management's only larger peer. Based in Phoenix, Apollo Group operates 385 schools in the United States and abroad -- including the University of Phoenix -- with more than 362,000 students.
The market served by for-profit schools is vast. Some 18.2 million students enrolled at 4,400 post-secondary schools paid about $450 billion in tuition in 2007, according to most-recent figures from the Department of Education. Ten years ago, it was a $200 billion market.
Founded in 1962, Education Management's most visible local presence is the Art Institute of Pittsburgh. About half of the company's schools (45) are art institutes, whose degree programs include fashion, culinary, visual arts and media, and industrial and interior design. …