Federal

Educate Inc. Puts Division Up for Sale

By Rhea R. Borja — December 06, 2005 2 min read
  • Save to favorites
  • Print

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
Classroom Technology Webinar
How to Leverage Virtual Learning: Preparing Students for the Future
Hear from an expert panel how best to leverage virtual learning in your district to achieve your goals.
Content provided by Class
English-Language Learners Webinar AI and English Learners: What Teachers Need to Know
Explore the role of AI in multilingual education and its potential limitations.
Education Webinar The K-12 Leader: Data and Insights Every Marketer Needs to Know
Which topics are capturing the attention of district and school leaders? Discover how to align your content with the topics your target audience cares about most. 

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 A Flood of Public Feedback Has Delayed a Title IX Change Covering Trans Athletes—Again
The Biden administration has not taken the final step to adopt long-awaited Title IX changes that would explicitly protect LGBTQ+ students.
5 min read
Isaya S. waves out the window of a Seattle Public Schools bus while participating in the annual Seattle Pride Parade on June 25, 2023, in Seattle.
Isaya S. waves out the window of a Seattle Public Schools bus while participating in the annual Seattle Pride Parade on June 25, 2023, in Seattle.
Lindsey Wasson/AP
Federal Is Funding for School Archery and Hunting Programs Really at Risk?
A U.S. Department of Education document led to confusion among school administrators about funding for archery and hunting programs.
4 min read
Students participate in a school archery program. A group of congressional lawmakers are working to amend federal law to ensure schools can purchase bow and arrows and other supplies for archery, sharp shooting, and hunting programs in schools.
Students participate in a school archery program. A group of congressional lawmakers are working to amend federal law to ensure schools can purchase bow and arrows and other supplies for school archery, sharp shooting, and hunting programs with federal education funds.
Courtesy of the National Archery in the Schools Program
Federal A Senate Committee Takes Up School Book Wars, Complete With Sharp Partisan Divisions
The Senate Judiciary Committee hearing on "book bans" included one Republican senator reading sexually explicit passages.
4 min read
Alexi Giannoulias, Illinois secretary of state, talks with Chairman Richard Durbin, D-Ill., right, and Sen. Chuck Grassley, R-Iowa, during the Senate Judiciary Committee hearing titled "Book Bans: Examining How Censorship Limits Liberty and Literature," in Hart Building on Tuesday, September 12, 2023.
Alexi Giannoulias, Illinois secretary of state, talks with Sen. Richard Durbin, D-Ill., right, and Sen. Chuck Grassley, R-Iowa, during the Senate Judiciary Committee hearing titled "Book Bans: Examining How Censorship Limits Liberty and Literature," on Sept. 12, 2023.
Tom Williams/AP
Federal WATCH: 5 Key Takeaways on Education From the 1st GOP Presidential Debate
Among the highlights: take on the teachers' unions, scrap the Education Department, and boost reading.
8 min read
Republican presidential candidates, from left, former Arkansas Gov. Asa Hutchinson, former New Jersey Gov. Chris Christie, former Vice President Mike Pence, Florida Gov. Ron DeSantis, businessman Vivek Ramaswamy, former U.N. Ambassador Nikki Haley, Sen. Tim Scott, R-S.C., and North Dakota Gov. Doug Burgum stand on stage before a Republican presidential primary debate hosted by FOX News Channel on Aug. 23, 2023, in Milwaukee.
Republican presidential candidates, from left, former Arkansas Gov. Asa Hutchinson, former New Jersey Gov. Chris Christie, former Vice President Mike Pence, Florida Gov. Ron DeSantis, businessman Vivek Ramaswamy, former U.N. Ambassador Nikki Haley, Sen. Tim Scott, R-S.C., and North Dakota Gov. Doug Burgum stand on stage before a Republican presidential primary debate hosted by FOX News Channel on Aug. 23, 2023, in Milwaukee.
Morry Gash/AP