Shares of Sylvan Learning Systems Inc., which offers courses to 76,000 students worldwide, shot up 30% Tuesday after the company agreed to sell its primary- and secondary-education units and raised a revenue forecast.
Shares in Sylvan rose $3.44 to $14.87 in Nasdaq trading, marking the company's largest dollar increase in more than four years.
The Baltimore-based company would get as much as $300 million for selling the businesses to New York-based Apollo Management, its largest shareholder. Sylvan raised the sales forecast for the businesses it would keep.
The company also said it is disbanding a technology-investment unit that has led the firm to post losses since the fourth quarter of 2001.
"We're splitting the company into two," Sylvan President Peter Cohen said. Sylvan still will offer courses using the Internet to adults in the U.S. and will keep schools in France, Mexico, Spain and Switzerland that serve students under age 23, a spokesman said.
Sylvan will change its name and stock symbol within a year of completing the sale to private equity firm Apollo, run by financier Leon Black. Expected to close by June 30, the sale would allow Sylvan to focus on international and online university education, which accounted for about two-thirds of revenue.
Apollo would buy the right to the Sylvan name. An affiliate would get Sylvan Learning Center, which tutors students in reading and mathematics and helps them prepare for standardized tests, a spokesman said. There were 952 locations in the U.S. and Canada at the end of 2002.
Sylvan's earnings report, which last quarter had 13 revenue segments, would have about half as many, Chief Executive Douglas Becker said. The firm expects sales of up to $475 million from post-secondary education services this year, more than a previous forecast of up to $425 million.