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
Artificial Intelligence Webinar
AI and Educational Leadership: Driving Innovation and Equity
Discover how to leverage AI to transform teaching, leadership, and administration. Network with experts and learn practical strategies.
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
School Climate & Safety Webinar
Investing in Success: Leading a Culture of Safety and Support
Content provided by Boys Town
Assessment K-12 Essentials Forum Making Competency-Based Learning a Reality
Join this free virtual event to hear from educators and experts working to implement competency-based education.

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 From Our Research Center How Educators Say They'll Vote in the 2024 Election
Educators' feelings on Vice President Kamala Harris and former President Donald Trump vary by age and the communities where they work.
4 min read
Jacob Lewis, 3, waits at a privacy booth as his grandfather, Robert Schroyer, fills out his ballot while voting at Sabillasville Elementary School, Nov. 8, 2022, in Sabillasville, Md.
Jacob Lewis, 3, waits at a privacy booth as his grandfather, Robert Schroyer, fills out his ballot while voting at Sabillasville Elementary School, Nov. 8, 2022, in Sabillasville, Md.
Julio Cortez/AP
Federal Q&A Oklahoma State Chief Ryan Walters: 'Trump's Won the Argument on Education'
The state schools chief's name comes up as Republicans discuss who could become education secretary in a second Trump administration.
8 min read
Ryan Walters, then-Republican candidate for Oklahoma State Superintendent, speaks at a rally, Nov. 1, 2022, in Oklahoma City.
Ryan Walters speaks at a rally on Nov. 1, 2022, in Oklahoma City as a candidate for state superintendent of public instruction. He won the race and has built a national profile for governing in the MAGA mold.
Sue Ogrocki/AP
Federal Why Trump and Harris Have Barely Talked About Schools This Election
Kamala Harris and Donald Trump haven't outlined many plans for K-12 schools, reflecting what's been the norm in recent contests for the White House.
6 min read
Republican presidential nominee former President Donald Trump and Democratic presidential nominee Vice President Kamala Harris participate during an ABC News presidential debate at the National Constitution Center, Tuesday, Sept.10, 2024, in Philadelphia.
Republican presidential nominee former President Donald Trump and Democratic presidential nominee Vice President Kamala Harris participate in an ABC News presidential debate at the National Constitution Center on Sept.10, 2024, in Philadelphia.
Alex Brandon/AP
Federal Who Could Be Donald Trump's Next Education Secretary?
Trump must decide if he wants someone with a "proven track record" or a "culture warrior," says a former GOP Hill staffer.
9 min read
President Donald Trump, right, arrives in a classroom at St. Andrew Catholic School in Orlando, Fla., on March 3, 2017.
President Donald Trump, right, arrives in a classroom at St. Andrew Catholic School in Orlando, Fla., on March 3, 2017.
Joe Burbank/Orlando Sentinel via AP