Filed by Career Education Corporation
Pursuant to Rule 425 under the Securities Act
of 1933 and deemed filed pursuant to Rule 14a-12
under the Securities Exchange Act of 1934.
Subject Company: Whitman Education Group, Inc.
COMMISSION FILE NO. 1-13722
Date: March 26, 2003
On March 26, 2003, the following press release was jointly issued by Career
Education Corporation and Whitman Education Group, Inc.
FOR IMMEDIATE RELEASE
Contact: Tracy K. Lorenz Fernando L. Fernandez
Director of Investor Relations Chief Financial Officer
Career Education Corporation Whitman Education Group
847/585-3899 800/445-6108
WWW.CAREERED.COM WWW.WHITMANEDUCATION.COM
CAREER EDUCATION CORPORATION
AND WHITMAN EDUCATION GROUP, INC.
SIGN DEFINITIVE MERGER AGREEMENT
CEC TO EXPAND ITS HEALTH EDUCATION DIVISION
Hoffman Estates, Ill. and Miami, Fl., (March 26, 2003) - Career Education
Corporation (NASDAQ:CECO) and Whitman Education Group, Inc. (AMEX: WIX)
announced today that they have signed a definitive merger agreement under which
CEC will acquire all of the shares of Whitman for a combination of cash and CEC
stock. The transaction will significantly enhance CEC's position in the
rapidly-growing health education field.
Under the terms of the agreement, Whitman's shareholders will receive $6.00
in cash and $8.25 in CEC common stock (for a combined consideration of $14.25)
per each share of Whitman stock. The stock portion of the consideration is
subject to adjustment based on CEC's average share price during a specified
period prior to closing. The
transaction enterprise value is expected to be approximately $230 million. For
the fiscal year ending March 31, 2003, Whitman is expecting to have revenues of
approximately $108 to $109 million and EBITDA, excluding expected transaction
costs, of approximately $16.6 to $16.8 million. CEC anticipates the merger will
be accretive to CEC's earnings per share in 2003.
Phillip Frost, M.D., Chairman of Whitman, and other directors and officers
who collectively own approximately 34% percent of Whitman stock, have agreed to
vote their shares in favor of the merger. A vote of a majority of Whitman's
outstanding common stock will be required to approve the merger. The transaction
is expected to close by July 2003, and is subject to customary closing
conditions including regulatory and Whitman shareholder approvals.
"This strategic combination will benefit the shareholders, students and
employees of both CEC and Whitman," said John M. Larson, CEC's Chairman,
President and Chief Executive Officer. "Healthcare is a $1.4 trillion industry
in the United States, and Whitman's strong position in health education will
accelerate our expansion in this high-growth field. Additionally, its curricular
offerings in information technology and business studies will further enhance
our leadership in these fields. The merger will also increase degree options
available to students throughout the CEC system, add three regionally accredited
schools to the CEC network of schools and give us an additional regionally
accredited online platform.
"Whitman campuses will benefit from CEC's proven formula of investment in
marketing, retention, placement and curriculum development, which has increased
student population, improved placement success and driven significant gains in
revenues and operating income at all schools acquired by CEC," Larson said.
Whitman owns and operates three quality school brands, Ultrasound
Diagnostic School, Sanford-Brown College and Colorado Technical University with
22 campuses in 13 states and a total population of approximately 9,800 students:
- Ultrasound Diagnostic Schools, founded in 1977, has a total of 14 campuses
in New York, New Jersey, Pennsylvania, Massachusetts, Ohio, Maryland,
Florida, Georgia and Texas and offers a broad platform of occupational
associate degree and non-degree diploma programs in health education.
- Sanford-Brown College, founded in 1866, has four campuses in Missouri and
one in Illinois and offers bachelor's and associate degree programs and
non-degree diploma programs in health education, business and information
technology. The health education programs include practical and registered
nursing programs.
- Colorado Technical University, founded in 1965, has two campuses in
Colorado and one in South Dakota and also offers online programs.
Colorado Technical University offers predominately bachelor's, master's and
doctoral degree programs in business and information technology. Its
on-campus and online programs are accredited by North Central Association
of Colleges and Schools.
"Together, CEC and Whitman are an excellent strategic fit, and this merger
allows each school system to leverage the other's strengths," said Richard C.
Pfenniger, Jr., Whitman's Chairman, President and Chief Executive Officer.
"Whitman brings to CEC a solid platform for growth in health education, strong
recent financial and operating performance, quality brand names with significant
opportunities for expansion, additional regional accreditation, advanced degree
programs and an established presence in attractive geographic markets."
Commenting on Whitman's outlook, Mr. Pfenniger said, "Due to our continued
strong performance, we are increasing our net income guidance for our current
fiscal year ending March 31, 2003. We now believe that revenue will be $108 to
$109 million, EBITDA will be $16.1 to $16.3 million, net income will be $7.1 to
$7.3 million, and diluted earnings per share will be $0.46 to $0.47."
The expected guidance includes approximately $0.5 million, or approximately
$0.02 per fully diluted share, of expenses to be incurred in connection with the
merger through the period ending March 31, 2003. Whitman's previous guidance
projected revenue of $107 to $108 million, net income of $6.7 to $7.0 million,
and diluted earnings per share of $0.43 to $0.45.
The transaction is expected to be tax-free under U.S. federal tax law to
both companies and their respective shareholders, except for the cash
consideration, which may be taxable to Whitman's shareholders. CEC retained
Credit Suisse First Boston, LLC to provide them with certain financial advice,
while Whitman retained Legg Mason Wood Walker, Incorporated, as its financial
advisor.
CEC and Whitman will jointly host a conference call with financial analysts
on Thursday, March 27, 2003 at 8:30 a.m. (Eastern Time) to discuss the merger.
To participate, you can either dial (973) 317-5319 and cite "CAREER EDUCATION
AND WHITMAN CONFERENCE CALL," or listen to the web cast at WWW.CAREERED.COM or
WWW.WHITMANEDUCATION.COM. A slide presentation that will accompany the
conference call can be accessed live via a web cast at WWW.CAREERED.COM or
WWW.WHITMANEDUCATION.COM. Following the conference call, a rebroadcast will be
available for 90 days at WWW.CAREERED.COM or WWW.WHITMANEDUCATION.COM, or for
seven days by calling (973) 709-2089 and citing code 288281.
Career Education Corporation (WWW.CAREERED.COM) is the world's largest
on-campus provider of private, for-profit postsecondary education and has a
rapidly-growing presence in online education. CEC's Colleges, Schools and
Universities Group operates 51 campuses in the U.S., Canada, France, the United
Kingdom and the United Arab Emirates and offers master's degree, bachelor's
degree, associate degree and diploma
programs in the career-oriented disciplines of visual communication and design
technologies, information technology, business studies, culinary arts and health
education. The Online Education Group's AIU Online Division offers master's
degree, bachelor's degree and associate degree programs in information
technology, business administration, visual communication and education.
Including the impact of CEC's acquisition of the INSEEC Group on February 18,
2003 and the proposed merger of Whitman, CEC would have 73 campuses and CEC's
total student population on January 31, 2003 would have been approximately
64,900 students.
Whitman Education Group, Inc. (WWW.WHITMANEDUCATION.COM) is a proprietary
provider of career-oriented postsecondary education. Through three wholly-owned
subsidiaries, Whitman currently operates 22 schools in 13 states offering a
range of graduate, undergraduate and non-degree certificate and diploma programs
primarily in the fields of healthcare, information technology and business, to
approximately 9,800 students.
ADDITIONAL INFORMATION:
EXCEPT FOR THE HISTORICAL AND PRESENT FACTUAL INFORMATION CONTAINED HEREIN,
THE MATTERS SET FORTH IN THIS RELEASE, INCLUDING STATEMENTS AS TO THE EXPECTED
DATE OF THE CLOSING OF THE MERGER, FUTURE FINANCIAL AND OPERATING RESULTS,
EXPECTED BENEFITS AND SYNERGIES OF THE MERGER, TAX TREATMENT OF THE MERGER,
FUTURE OPPORTUNITIES AND ANY OTHER EFFECT, RESULT OR ASPECT OF THE PROPOSED
TRANSACTION AND ANY OTHER STATEMENTS IDENTIFIED BY WORDS SUCH AS "ANTICIPATES,"
"EXPECTS," "PROJECTS," "PLANS," "WILL," AND SIMILAR EXPRESSIONS ARE
FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE "SAFE HARBOR" PROVISIONS OF
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. SUCH STATEMENTS ARE BASED
ON INFORMATION CURRENTLY AVAILABLE TO US AND INVOLVE RISKS AND UNCERTAINTIES
THAT COULD CAUSE OUR ACTUAL GROWTH, RESULTS, PERFORMANCE AND BUSINESS PROSPECTS
AND OPPORTUNITIES TO DIFFER MATERIALLY FROM THOSE EXPRESSED IN, OR IMPLIED BY
THESE STATEMENTS. THESE RISKS AND UNCERTAINTIES INCLUDE, BUT ARE NOT LIMITED TO,
COSTS AND DIFFICULTIES RELATED
TO THE INTEGRATION OF ACQUIRED BUSINESSES, COSTS, DELAYS, AND ANY OTHER
DIFFICULTIES RELATED TO THE MERGER, FAILURE OF THE PARTIES TO SATISFY CLOSING
CONDITIONS, RISKS AND EFFECTS OF LEGAL AND ADMINISTRATIVE PROCEEDINGS AND
GOVERNMENTAL REGULATIONS, FUTURE FINANCIAL AND OPERATIONAL RESULTS, COMPETITION,
GENERAL ECONOMIC CONDITIONS, ABILITY TO MANAGE AND CONTINUE GROWTH, AND OTHER
RISK FACTORS RELATING TO OUR INDUSTRY AND BUSINESS AS DETAILED IN CEC'S ANNUAL
REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2002 AND FROM TIME TO TIME
IN EACH OF CEC'S AND WHITMAN'S REPORTS FILED WITH THE SEC. CEC AND WHITMAN
DISCLAIM ANY RESPONSIBILITY TO UPDATE THESE FORWARD-LOOKING STATEMENTS.
CEC AND WHITMAN WILL FILE A PROXY STATEMENT/PROSPECTUS CONCERNING THE
PROPOSED MERGER TRANSACTION WITH THE SEC AS SOON AS PRACTICABLE. INVESTORS ARE
URGED TO READ THE PROXY STATEMENT/PROSPECTUS WHEN IT BECOMES AVAILABLE AND ANY
OTHER RELEVANT DOCUMENTS FILED WITH THE SEC BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT CEC, WHITMAN AND THE MERGER. YOU WILL BE ABLE TO OBTAIN THE
DOCUMENTS FREE OF CHARGE AT THE WEB SITE MAINTAINED BY THE SEC AT WWW.SEC.GOV.
IN ADDITION, YOU MAY OBTAIN DOCUMENTS FILED WITH THE SEC BY CEC FREE OF CHARGE
BY REQUESTING THEM IN WRITING FROM CAREER EDUCATION CORPORATION, 2895
GREENSPOINT PARKWAY, SUITE 600 HOFFMAN ESTATES, ILLINOIS 60195 ATTENTION:
INVESTOR RELATIONS DEPARTMENT, OR BY TELEPHONE AT (847) 585-3899. YOU MAY OBTAIN
DOCUMENTS FILED WITH THE SEC BY WHITMAN FREE OF CHARGE BY REQUESTING THEM IN
WRITING FROM WHITMAN EDUCATION GROUP, INC., 4400 BISCAYNE BOULEVARD, MIAMI,
FLORIDA 33137, OR BY TELEPHONE AT (800) 445-6108.
WHITMAN EDUCATION GROUP, INC. AND ITS DIRECTORS AND EXECUTIVE OFFICERS MAY
BE DEEMED TO BE PARTICIPANTS IN THE SOLICITATION OF PROXIES FROM THE
SHAREHOLDERS OF WHITMAN EDUCATION GROUP, INC. IN CONNECTION WITH THE MERGER.
INFORMATION ABOUT WHITMAN DIRECTORS AND EXECUTIVE OFFICERS AND THEIR OWNERSHIP
OF WHITMAN STOCK IS SET FORTH IN THE PROXY STATEMENT FOR WHITMAN'S 2002 ANNUAL
MEETING OF SHAREHOLDERS, WHICH WAS FILED ON JULY 15, 2002. INVESTORS MAY OBTAIN
ADDITIONAL INFORMATION REGARDING SUCH PARTICIPANTS' INTERESTS IN THE MERGER BY
READING THE PROXY STATEMENT/ PROSPECTUS WHEN IT BECOMES AVAILABLE.
BECAUSE THE PROXY STATEMENT/PROSPECTUS WILL CONTAIN IMPORTANT INFORMATION
ABOUT WHITMAN, CEC AND THE MERGER, WHITMAN INVESTORS SHOULD READ THE PROXY
STATEMENT/ PROSPECTUS CAREFULLY WHEN IT BECOMES AVAILABLE BEFORE MAKING ANY
VOTING OR INVESTMENT DECISIONS.
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