San Francisco-based private equity firm Gryphon Investors has acquired National Career Education (NCE), the first step in the firm’s buildup of its post-secondary education platform, Gryphon Colleges Corporation.
Terms of the deal were not disclosed.
NCE is a holding company with post secondary schools located in the western US operating under the NCE College, Lamson College, Institute for Business and Technology, and Tucson College brands.
The schools offer curricula in allied health, electronics and mechanical trades, legal, and business.
David Andrews, Gryphon’s founder and managing partner, sees “mega” trends in the career and for-profit post-secondary education markets. “We’ve seen an increase in the degree to which skills matter in the labor force. We see the increase of the wage gap between skilled and low-skilled labor. Increasingly, adults are going back to school while working in order to get their credentials. Often, they’re financed by employers or the government.”
Gryphon Colleges formed in 2004 as a partnership with management and is led by James Berk and Joseph Fox, both of whom are seasoned executives with background in education. Andrews says Gryphon typically partners with executives that bring proven skills and track records in their fields.
Berk began as a secondary school teacher and went on to become the youngest principal in the history of Los Angeles. Recently, he’s served as president and chief executive officer of Hard Rock Café International and CEO of resort and vacation company Fairfield Communities.
Fox has 17 years of senior operations management experience in post-secondary education, the last seven years with Corinthian Colleges Corporation, one of the nation’s largest and fastest growing publicly-traded post secondary companies.
Andrews says Gryphon currently has two more school acquisitions sitting on the deal table, one in the Midwest and the other in the Southeast. This acquisition represents Gryphon’s general approach to investing, buying up small- to medium-sized regional companies and clustering them into one holding. Typically, the firm looks to invest between $20 million to $75 million of its own capital.
Gryphon isn’t the first private equity firm to foray into the education post-secondary education sector. In November, Boston’s TA Associates acquired Florida Career College in a $53 million recapitalisation. In April, Cleveland-based The Riverside Company acquired Arlington, Texas-based post-secondary vocational school ATI Enterprises and its sister company, ATI Enterprises of Florida.