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Corinthian Extends Acquisition Spree

June 11, 2003|Ronald D. White | Times Staff Writer

Corinthian Colleges Inc. of Santa Ana, continuing its buying spree of vocational and technical training schools, announced two acquisitions Tuesday that would expand the company's technology and health-related divisions.

Corinthian said it would pay about $56 million for Career Choices Inc. and its 10 campuses in California, Washington and Oregon, which operate under the names Sequoia Institute, Ashmead College and Eton Technical Institute.

Ashmead and Eton offer diploma programs in the medical field and Sequoia in automotive technology.

The company also said it was buying the assets of East Coast Aero Tech, which operates a campus in Bedford, Mass., for about $2.9 million. That deal would add aircraft maintenance technology training to Corinthian's curriculum.

Collectively, the two acquisitions would add about 3,000 students to Corinthian's companywide enrollment of almost 44,000.

Wall Street analysts praised Corinthian's push into the fast-growing area of career training for the health industry.

"They saw the need before anyone else for more trained health-care workers, and now everyone else is trying to get a share of that space," said analyst Jeffrey M. Silber at investment bank Gerard Klauer Mattison in New York.

Tony Digiovanni, president and chief operating officer of Corinthian, said that with East Coast Aero Tech, the company is betting that many aircraft mechanics who were trained during the Vietnam War era will begin to retire in the coming years.

"We believe that job demand in aircraft technology and maintenance will rise from 158,000 jobs in 2000 to 184,000 by 2010," Digiovanni said.

Corinthian, which has more than 2,300 employees, operates 68 colleges and two continuing-education centers in 21 states.

In the nine months that ended March 31, the company's revenue rose 55% to $378.4 million and net income increased 78% to $47.9 million, mostly because of increasing enrollments, expanded online course offerings and cost cutting.

The latest purchases, to be financed with cash and a previously announced $100-million credit agreement, are expected to be completed during Corinthian's fiscal first quarter ending Sept. 30, according to the company.

Shares of Corinthian rose $1.32 to $46.78 on Nasdaq, near their 52-week high of $49.28 reached Friday.

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