Sterling Capital Buys Law School

by Kelly Holman
January 22, 2004

Brace yourself for the lawyer jokes.

Sterling Capital Partners has made a growth capital investment in Jacksonville, Fla.'s Florida Coastal School of Law. The deal, which sources said came to more than $15 million, is believed to be the first private equity investment in a law school.

No financial deal terms were disclosed, but Sterling Capital typically invests in businesses that generate $5 million to $25 million of cash flow.

"It's a very exciting opportunity for us," said Tom Wippman, a principal at Sterling Capital Partners who spearheaded the deal for the fund. "What we found is that law schools seem to be magnets for great thinkers, and we hope to capitalize on a number of initiatives the faculty and community at large want to bring to the school."

That doesn't mean Florida Coastal the only for-profit law school that is accredited by the American Bar Association, according to Wippman has any plans to dispense with its core operations.

"We will continue to adhere to our current core business as a brick-and-mortar law school providing high-quality legal education to 750 to 1,000 students," Wippman said, speaking on behalf of the school.

He declined to say how much equity Sterling Capital invested for its controlling stake.

Sterling hopes to expand the school by offering more courses to practicing attorneys. In addition, it plans to offer law-related programs for professionals in other disciplines. In May 2004, for example, it is planning to hold a seminar called Forensics and the Law.

Northbrook, Ill.-based Sterling Capital has a history of investments in educational companies. Last January it acquired Professional Career Development Institute LLC of Atlanta, a distance learning school that offers high school equivalency certificates. It has also invested in Baltimore's Sylvan Learning Systems Inc., which offers tutorial services and adult testing and training.

Winston & Strawn LLP was counsel to Sterling Capital, while Holland & Knight LLP was legal adviser to Florida Coastal.

The Sterling deal follows another middle-market education investment by a private equity firm. Detroit-based Huron Capital Partners LLC said Tuesday it had acquired Dayton, Ohio-based Miami-Jacobs Career College through its existing portfolio company, Virginia Beach, Va.-based Delta Educational Systems Inc. Terms were not released.