Federal

Educate Inc. Puts Division Up for Sale

By Rhea R. Borja — December 06, 2005 2 min read

The tutoring company Educate Inc. wants to sell its main supplemental-services division after it posted lackluster sales in the third quarter.

The Baltimore-based company announced its aim in late October to sell Education Station. That subsidiary is one of the big players in the highly competitive field of providers offering publicly financed after-school tutoring for students from public schools that fail to make targets for adequate yearly progress under the federal No Child Left Behind Act. (” Supplemental Help Can Be Hard to Find for Rural Students,” this issue.)

Education Station operates in more than 70 school districts—most of them in urban areas—in 37 states. It served about 30,000 students last year, and has about 350 full-time employees. Educate Inc. hopes to sell the subsidiary in the next six months to a year.

The time and money needed to expand Education Station, is beyond what the parent company wants to invest, especially at a time when Educate Inc. is expanding its tutoring services for the consumer market, said Jeffrey Cohen, the president of Catapult Learning, Educate Inc.’s K-12 division, which oversees the NCLB-services division.

“It’s a labor-intensive business,” he said of Education Station. “It requires a lot of senior-management focus, financial resources, and hundreds if not thousands of employees.”

Education Station isn’t growing as robustly as other providers of NCLB tutoring services, said Trace Urdan, a senior analyst at Robert W. Baird & Co., an investment bank based in Milwaukee. That lagging performance hurts in a field in which all but the strongest players could soon be knocked out, he said.

“It’s a dogfight,” Mr. Urdan said of the competition in the supplemental-services market.

Some of the companies likely to bid on Education Station include New York City-based Platform Learning, whose supplemental-services division has grown rapidly, and Kaplan Inc., also based in New York City, Mr. Urdan said. He would not speculate on the dollar value of Education Station to a buyer.

While Education Station’s year-to-date revenues have risen 28 percent—to $28 million—compared with the same period in 2004, the division also posted a 4 percent revenue decrease in the third quarter, compared with the same period last year. Education Station’s year-to-date revenues constitute 10 percent of the overall company’s revenues.

“The truth is that it’s too competitive to make a lot of money in this marketplace,” Mr. Urdan said. “On the other hand, you’ve got a market right now that’s white-hot. If there is any time to sell, they’re in that window now.”

Events

This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
Teaching Webinar
Interactive Learning Best Practices: Creative Ways Interactive Displays Engage Students
Students and teachers alike struggle in our newly hybrid world where learning takes place partly on-site and partly online. Focus, engagement, and motivation have become big concerns in this transition. In this webinar, we will
Content provided by Samsung
This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
Classroom Technology Webinar
Educator-Driven EdTech Design: Help Shape the Future of Classroom Technology
Join us for a collaborative workshop where you will get a live demo of GoGuardian Teacher, including seamless new integrations with Google Classroom, and participate in an interactive design exercise building a feature based on
Content provided by GoGuardian
School & District Management Live Online Discussion A Seat at the Table With Education Week: What Did We Learn About Schooling Models This Year?
After a year of living with the pandemic, what schooling models might we turn to as we look ahead to improve the student learning experience? Could year-round schooling be one of them? What about online

EdWeek Top School Jobs

Teacher Jobs
Search over ten thousand teaching jobs nationwide — elementary, middle, high school and more.
View Jobs
Principal Jobs
Find hundreds of jobs for principals, assistant principals, and other school leadership roles.
View Jobs
Administrator Jobs
Over a thousand district-level jobs: superintendents, directors, more.
View Jobs
Support Staff Jobs
Search thousands of jobs, from paraprofessionals to counselors and more.
View Jobs

Read Next

Federal CDC: Nearly 80 Percent of K-12, Child-Care Workers Have Had at Least One COVID-19 Shot
About four out of five teachers, school staffers, and child-care workers had first COVID-19 vaccine doses by the end of March, CDC says.
2 min read
John Battle High School teacher Jennifer Daniel receives her COVID-19 vaccine on Jan. 11, 2021. Teachers received their first vaccine during an all-day event at the Virginia Highlands Higher Education Center in Abingdon, Va.
John Battle High School teacher Jennifer Daniel receives her COVID-19 vaccine on Jan. 11at the Virginia Highlands Higher Education Center in Abingdon, Va.
David Crigger/Bristol Herald Courier via AP
Federal Ed. Dept. to Review Title IX Rules on Sexual Assault, Gender Equity, LGBTQ Rights
The review could reopen a Trump-era debate on sexual assault in schools, and it could spark legal discord over transgender student rights.
4 min read
Symbols of gender.
iStock/Getty
Federal Q&A EdWeek Q&A: Miguel Cardona Talks Summer Learning, Mental Health, and State Tests
In an interview after a school reopening summit, the education secretary also addressed teachers' union concerns about CDC guidance.
10 min read
Education Secretary Miguel Cardona speaks during a press briefing at the White House on March 17, 2021.
U.S. Secretary of Education Miguel Cardona speaks during a press briefing at the White House on March 17.
Andrew Harnik/AP
Federal Senators Press Deputy Education Secretary Nominee on School Closures, Lost Learning Time
If confirmed, San Diego Unified Superintendent Cindy Marten would be the Education Department's number two as it urges in-person learning.
5 min read
San Diego Unified School District Superintendent Cindy Marten speaks at Lincoln High School in San Diego during the State of the District Address on Oct. 20, 2015.
San Diego Unified School District Superintendent Cindy Marten would be second in command at the U.S. Department of Education if confirmed as deputy secretary.
Misael Virgen/San Diego Union-Tribune