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  • pg 1
									    Broker Opportunities
in the Private Career School
    and College Industry

        Orlando, Florida
         June 19, 2010

              Barry J. Berkowitz, Ph.D., CBI
              Susan F. Schulz, Ed.D.
Who We Are

• Barry Berkowitz
  • President of Berkowitz Acquisitions
  • President and Broker for Schools for Sale International, Inc.
  • Secretary for BBF
  • CBI for IBBA
• Susan Schulz
  • President of Susan F. Schulz & Associates, Inc
  • Owner and Real Estate Associate for Schools for Sale
    International, Inc.
What are Private Career Schools and Colleges?

•   Trains people for quick hiring into entry-level jobs
•   For-profit or not-for-profit
•   Occupational-specific training
•   Certificates through graduate degrees
•   Located throughout U.S., Canada, South America, and beyond
•   Examples
     •   University of Phoenix
     •   DeVry Institute
     •   New Horizons
     •   Local massage therapy training
     •   Cosmetology schools
Fit Within Higher Education

• Ranges from mom and pop schools to publically
  traded, multi-campus companies
• Sometimes seen as aggressive marketing
  organizations enrolling anyone to benefit from
  government funding
• Typically serves the underserved
• Strong contributor to the tax base
Annual Enrollment at All Levels by Sector
              2007- 2008
Award Distribution at Career Colleges
             2004 - 2005
Job Enhancements Reported by Students
  Who Attained Certificates or Degrees
    Projected % Change in Employment
in Fastest Growing Occupations, 2006-2016
 Average Published Tuition and Fees by
Institutional Type and Control, 2006-2007
Sources of Tuition Funding

•   Government loans and grants
•   Local Workforce grants
•   Veterans
•   Vocational Rehabilitation
•   Banks
•   In-house lending
          Annual Enrollment
in Title IV Eligible Career Colleges
Current Issues for Career Colleges

•   Gainful employment
•   Debt ratio
•   Aggressive marketing tactics
•   Publically traded companies
•   Profit taking
Who Regulates Private Career Schools and Colleges?

  • State licensing boards
  • Accrediting agencies
  • Programmatic boards like Board of Cosmetology,
    Board of Nursing
  • Department of Education
  • Other
National Default Rates by Sector
Career Colleges in Florida (Approx. 800)

Of 307 degree-granting institutions in Florida:
    •   168 are career colleges and universities
         • 77 career colleges are less-than-2-year institutions
         • 45 are 2-year
         • 46 are 4-year-or-more
Students in Florida’s career colleges are:
    •   Female – 61%
    •   Enrolled full-time – 83%
    •   Over 25 years old – 54%
    •   Minority – 51%
In 2007-2008, 13% of all postsecondary education students in
Florida attend career colleges. Florida’s career colleges
    •   40% of certificates
    •   19% of associate degrees
    •   7% of bachelor’s degrees
    •   7% of master’s degrees, and
    •   9% of doctoral degrees.
Florida Career Colleges
Marketing Strategies

• Word-of-Mouth
• Internet
• Local Print Media Billboards
• Radio
• TV
• Lead Generation Companies
The Current M&A Market for Career Schools

• Current focus on career schools for training and
• Current Wall Street Focus
• Long-time school owners see an opportunity to sell
• Investors see opportunities to buy
Who Acquires Career Schools and Why?

• Platform companies to gain a new or competitive
  market space
• Private equity groups who want to add career schools
  to their portfolios
• Other school owners who want to expand or gain
  accreditation, Title IV Funding or other benefits for
  their schools
Who Acquires Career Schools and Why? (cont.)

• Other school owners who want a new location for any
  number of reasons
• International school owners who want a presence in
  the U.S.
• “I always wanted to own a career school” people.
The Motivation to Sell

•   Cash out
•   Burned out, Time to move on
•   Retirement, illness, divorce
•   Too many troubles in the school
•   Lack of capital to bring the school to the next level
Getting the School Ready for the Market Place

 • Focus on school growth especially during the selling
 • Enhance the organization chart. Have strong staff to
   address the questions: what does the owner do and what
   will it cost to replace him/her?
 • Formalize policies and procedures
 • Clean up any regulatory issues
 • Create a document room
 • Decide what to tell staff
 • Double check change of ownership procedures with all
   regulatory bodies
Documents Needed to Sell

• In addition to the normal items in the Confidential
  Business Review (CBR) there also needs to be
  information about:
   •   Enrollment Figures
   •   Class Starts
   •   Retention Rates
   •   Job Placement
• The contents of the Document Room will need to be
  complete and organized.
How to Market a Career School

• Reach people in the career school sector, private
  equity groups who want to add career schools to their
  portfolios, others
• Find new markets that may be interested in the
  career school sector
• Work with specialists in the career school sector who
  already have the contacts and resources
The Sales Process

•   Can be lengthy
•   What to watch for in the due diligence process
•   What events are linked to regulatory requirements?
•   Use your experts
•   Your role
Risks and Obstacles

• What you don’t know
• Regulatory requirements before, during, and after
• Timing, Deadlines
Your Next Steps

    • Resources
    • M & A Specialists
                          Contact Us

Barry J. Berkowitz                     Dr. Susan F. Schulz
6615 W. Boynton Beach Blvd., Ste 350   P.O. Box 2589
Boynton Beach, FL 33483                Boca Raton, FL 33427
(561) 241-2412 Tel                     (561) 483-9554 Tel
(561) 375-6338 Fax                     (561) 451-4602 Fax
BJBerk@comcast.net                     Susan@SusanFSchulz.com
www.BerkowitzAcquisitions.com          www.SusanFSchulz.com

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