American Public Education Increases Price for IPO Shares

CHARLESTON W.Va.

Investor interest in American Public Education’s planned initial public stock offering appears to be rising.

The Charles Town-based company, which runs online universities primarily for military personnel, has increased the price range for the offering to $18 to $19 per share, according to an amended Securities and Exchange Commission filing. American Public had anticipated pricing the shares between $15 and $17 for the deal, which is on this week’s IPO schedule.

Upping the price just before an IPO is considered a sign of strong investor demand for the shares.

American Public expects to net approximately $78.9 million from the offering of more than 4.68 million shares, according to the filing. American Public’s take could hit $91 million if the investment banks underwriting the IPO purchase an additional 703,125 shares.

The big beneficiaries of the deal are a handful of investors who already own American Public’s stock. The company plans to pay them $86.7 million immediately before the IPO.

The biggest sums will go to investment companies ABS Capital Partners, which stands to receive $37.8 million, and Camden Partners, which would get $12.4 million, according to the filing.

American Public Chief Executive Wallace E. Boston Jr. stands to receive $2.48 million, Executive Vice President James Herhusky would receive more than $3.49 million, and Chief Financial Officer Harry Wilkins more than $1.4 million.

American Public started in 1993 as American Military University in Manassas, Va. It later moved its headquarters to Charles Town in West Virginia’s Eastern Panhandle to obtain accreditation from the Higher Learning Commission of the North Central Association.

The company’s universities now have approximately 25,000 students across the United States and more than 135 other countries, according to its prospectus. The vast majority more than eight out of 10 are in the U.S. military.

American Public earned $1.8 million on revenue of $40 million last year, compared with a $404,000 on revenue of $28.17 million in 2005. Through the first half of this year, American reported earning $3.57 million on $30.26 million in revenue.

American said it relies on cash from operations and long-term debt to finance its growth. American lists no long-term debt on its balance sheet.

Securities firm William Blair & Co. is leading the underwriting team, which includes Piper Jaffray, Stifel Nicolaus and three smaller firms. American Public says its shares will be listed on the Nasdaq Stock Market.



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