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EDMC was incorporated in Pennsylvania in 1962 and acquired its first educational institution in 1969, when it purchased the nearly 50-year-old Art Institute of Pittsburgh. [1] [2] [3] By 1996 EDMC had grown to 14 schools. In October of the same year the company held an initial public offering, which brought in $45 million dollars. [4] [5] By 1998, EDMC served 17,400 students at 15 Art Institutes and three additional schools. [1]
In July 2001, EDMC reached an agreement to purchase Chicago-based Argosy Education Group, the operator of Argosy University campuses, for $78 million.. The acquisition allowed EDMC to offer programs in law, education and business. [4] [6]
In 2003, the company again expanded, with the acquisition of the health sciences-focused South University in April [7] [6] and 18 schools operated by the Ohio-based American Education Centers in June, which were rebranded a year later as Brown Mackie College. [8] [5] In September 2003, former Maine governor John R. McKernan, Jr. became EDMC's chief executive officer. [9] [10] He oversaw continued acquisitions of existing art and design schools in the U.S. and Canada, construction of new Art Institute locations and the establishment of online education programs. [6]
Goldman Sachs, Providence Equity Partners and Leeds Equity Partners acquired EDMC and its 70 schools for $3.4 billion in March 2006, taking it private once again. [11] [12] [13] At the time of the acquisition EDMC's schools were serving around 72,000 students, 4,000 of whom were enrolled in online programs. [12] The additional capital was used grow online enrollment to more than 40,000 students by the end of the decade, made possible in part by a 2006 Congressional revision to the "50 percent" rule, which formerly required accredited schools to enroll more than 50 percent of their students in campus-based programs in order to maintain federal loan eligibility. [14] [12] In January 2007, Todd Nelson became the company's chief executive officer [9] and oversaw EDMC's second public offering in 2009, which brought in more than $330 million dollars when the company's stock was released for sale on the NASDAQ. [2] [11] [15] Following the public offering, Goldman Sachs retained a 40 percent ownership of the company. [16]
In 2012, Edward West replaced Todd Nelson as chief executive officer, while Nelson replaced McKernan as the company's chairman. [9] After the growth in student numbers in the late 2000s, EDMC’s enrollment declined from around 160,000 students in 2011 to approximately 130,000 students at the end of 2012. [17] EDMC has attributed this to the economic downturn of the late 2000s and new federal restrictions on the Parent Loan for Undergraduate Students program. [18]
The decrease in enrollment, coupled with pending changes to the U.S. Department of Education's "gainful employment" rule, prompted EDMC to hold off on planned expansions in 2012, [19] and also led to several rounds of layoffs. [11] [20] The company has announced plans to open only one new school in the 2013 fiscal year. [21] In February 2013, EDMC announced a tuition freeze through at least 2015, as part of a strategy to refocus on students. [22]
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