Education Management Corp. used a new five-year, $2 million revolver to fund several acquisitions. The Pittsburgh-based company acquired Bradley Academy for the Visual Arts of York, Pa. and Dubrulle International Culinary & Hotel Institute of Canada of Vancouver, British Columbia last month. The new facility replaces a $1 million revolver that had one year remaining. "We were not that far away from having to redo the revolver anyway, but the impetus for doing it when we did were these acquisitions," said Kristin Gribble, treasurer of Education Management. The revolver will also be used for ongoing working capital needs, she added.
The facility is led by National City Bank and is priced at LIBOR plus 1%, but will adjust depending on the ratio of total funding debt-to-EBITDA, Gribble said. The old revolver was priced on a grid based on debt. National City was the lead on the previous revolver. Gribble said the bank has excellent service and the fact that many of its bankers are located in Pittsburgh is helpful. "We had a good relationship with them and we continue to have a good relationship with them," she added. Wachovia Bank and SunTrust Bank are the syndication agents. Fleet National Bank and J.P. Morgan hold documentation agent roles.
The revolver was also used to fund the acquisition of American Education Centers in September. In addition, the company acquired South University in July, prior to the refinancing. Education Management, a provider of private post-secondary education, has 65 primary campus locations in 24 states and two Canadian provinces.