Monday, July 14, 2003

Edison Goes Private

Critics may hail this as proof of the failure of free-market K-12 education. What it really proves is the resiliency of companies to change their business model quickly to best serve the goal of educating children. We have the Oakland schools model of getting a $100 million government bailout when the going gets rough or the Edison model of scaling back spending and going private when the going gets rough. Guess which model most of the world (including the media and the public school establishment) view as a success.

Edison has signed a merger agreement - with a new company formed by the management team and our new equity partner, Liberty Partners. - in order to take steps toward becoming a privately held company. This agreement was signed with unanimous approval of both a special committee of independent directors and Edison’s Board of Directors. Edison anticipates filing proxy materials promptly with the Securities and Exchange Commission for a special meeting and vote of shareholders this fall on this proposed merger.

Essentially, “going private” means that a company’s shares are no longer publicly traded on the stock market, but are purchased and held privately by a small number of owners. Edison was a privately owned company for many years before its initial public offering (IPO) in November of 1999 and subsequent listing on NASDAQ, so if the merger is approved by its shareholders, the company would effectively become like it was before it went public.

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