PITTSBURGH, – Education Management Corporation (EDMC) today announced that it has completed a capital restructuring agreement with debt holders after receiving all necessary regulatory approvals.
EDMC completed the first step of the restructuring on Jan. 5, 2015, when the company cancelled in excess of $1.3 billion of outstanding debt in exchange for the issuance of two senior secured term loans due July 2, 2020 in the aggregate principle amount of $400 million, mandatorily convertible preferred stock, optionally convertible preferred stock and warrants for common stock.
EDMC has now completed the second, and final, step of its capital restructuring. As part of the second step of the capital restructuring, the mandatorily convertible preferred stock was converted into common shares, representing 94.9 percent of outstanding shares of common stock. After the conversion, there is no shareholder that holds more than 20 percent of the common stock of EDMC. Holders of common stock prior to the restructuring will own 4 percent of the outstanding common stock after conversion of a second class of non-mandatorily convertible preferred stock, excluding outstanding warrants and option plans.
Eight members of EDMC’s 11-member board of directors resigned in connection with the completion of the restructuring. EDMC President & CEO Edward H. West remains on the board of directors, along with Kermit J. Cook and Mark A. McEachen, who were nominated by preferred shareholders earlier this year. In connection with the closing of the restructuring, the company anticipates adding John M. Danielson, Chairman and Managing Director of Chartwell Hamilton Group LLC and former Chief of Staff at the United States Department of Education where he served under U.S. Secretary of Education Rod Paige, and Johnathan D. Harber, former CEO of Pearson K12 Technology and founder of Schoolnet, Inc., to the board of directors, which remains subject to ratification by the company’s shareholders.
“We are pleased to have completed the restructuring in a timely manner and we look forward to working closely with our new majority shareholders,” said West. “This new capital structure will allow us to focus on providing an exceptional educational experience to over 100,000 students.”
About Education Management Corporation
Education Management Corporation (www.edmc.edu) provides post-secondary education in North America through four education systems, The Art Institutes, Argosy University, Brown Mackie Colleges, and South University, totaling 110 locations in 32 U.S. states and Canada. The company offers academic programs to students through campus-based and online instruction, or through a combination of both. The company is committed to offering quality academic programs and strives to improve the learning experience for its students. Its educational institutions offer students the opportunity to earn undergraduate and graduate degrees and certain specialized non-degree diplomas in a broad range of disciplines, including media arts, health sciences, design, psychology and behavioral sciences, culinary, business, fashion, legal, education and information technology.
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