The Princeton Review Agrees to Acquire Penn Foster, Leading Online Career Education Company

The Princeton Review Agrees to Acquire Penn Foster, Leading Online Career
Education Company
- Combined Company to Be Major Driver of Opportunities in Post-Secondary
Education

FRAMINGHAM, Mass., Oct. 19 /PRNewswire-FirstCall/ -- In a move to create one
of the largest and most diverse providers of post-secondary education services
in the United States, The Princeton Review, Inc. (Nasdaq: REVU), a leading
provider of test preparation and educational support services, today announced
that it has entered into a definitive agreement to acquire Penn Foster
Education Group, Inc., one of the oldest and largest online career education
companies in the United States. The purchase price is $170 million in cash,
subject to post-closing adjustments.

Penn Foster is a global leader in career-focused distance education with a
heritage that extends 118 years. The company operates three accredited
educational institutions--Penn Foster College, Penn Foster Career School, and
Penn Foster High School--that collectively serve more than 223,000 students in
over 150 countries.

The Princeton Review said the acquisition of Penn Foster, which is owned by
The Wicks Group of Companies, L.L.C., a private equity firm, is expected to
immediately increase the company's cash flow generating capabilities. On a
pro-forma combined basis, The Princeton Review would have reported revenues of
$238 million for the twelve month period from July 1, 2008 to June 30, 2009.
For the calendar year 2008, The Princeton Review reported revenues of
approximately $139 million, while Penn Foster had approximately $90 million in
revenues in the same period.

The transaction will combine two of the most-recognized educational brands in
the United States to create an organization that can capitalize on a diverse
range of opportunities in the secondary and post-secondary markets, and can be
a scale player in online education. The acquisition will also enhance The
Princeton Review's ability to grow through the addition of new test prep
services and partnerships with educational institutions, professional and
trade organizations and others.

Under the terms of the agreement, Penn Foster will become a wholly owned
subsidiary of The Princeton Review. It is expected to operate as a standalone
unit of the combined company, using its existing brands and under the
leadership of the current management team, maintaining its headquarters in
Scranton, Pennsylvania. The Princeton Review and Penn Foster will cooperate
closely on growth initiatives in customer care, marketing, technology and
cross-utilization strategies.

"The Princeton Review continually seeks new ways to meet the needs of
increasingly diverse student populations as a changing economy and new
technology transform the education landscape," said Michael Perik, President
and CEO of The Princeton Review, who will serve as CEO of the combined
company. "The addition of Penn Foster greatly expands our presence in
post-secondary education in terms of both market reach and the scope of
services we provide. Most importantly, Penn Foster gives us instant brand
leadership in the fast-growing career education market, offering accessible,
affordable and accredited career-oriented programs that address 21st century
workforce requirements. These strengths, as well as its highly cost-efficient
business model, make Penn Foster a real growth engine for The Princeton
Review."

"We are thrilled to become a part of The Princeton Review, an organization
with a shared passion and mission of helping students achieve their education
goals and embark on successful careers," said Stuart Udell, CEO of Penn
Foster, who will continue to lead the Penn Foster business after completion of
the deal. "Expanding access to post-secondary education is critical for every
individual and for our country's economic future. When you consider that an
estimated 40 percent of the working population of the U.S. will need to find a
new career over the next few years, you quickly realize that together we have
an extraordinary opportunity for growth and industry leadership."

The Princeton Review has obtained financing commitments for the deal,
comprised of approximately $155 million of debt financing and $30 million of
equity financing led by Bain Capital Venture Partners and Falcon Investment
Advisors, LLC, and expects to complete the transaction before the end of the
year. The transaction is subject to customary regulatory approvals, including
expiration or termination of any applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, and other closing
conditions.

Conference Call Details
The Princeton Review will discuss this transaction and provide additional
information on a conference call at 9:00 a.m. Eastern Daylight Time on Monday,
October 19, 2009. A copy of this press release is available at
http://ir.princetonreview.com/releases.cfm. To participate on the live call,
investors should dial 719-325-2170 approximately 10 minutes prior to the start
time. In addition, the call will be available via live webcast over the
Internet. To access the live webcast of the conference call, please go to
http://ir.princetonreview.com/events.cfm 15 minutes prior to the start time of
the call to register. An archived webcast will be available on the Company's
website at http://ir.princetonreview.com/events.cfm. Additionally, a replay
of the call can be accessed by dialing either 888-203-1112 or 719-457-0820,
passcode 7074684 , through 11:59 PM Thursday, November 19th.

About The Princeton Review
The Princeton Review (Nasdaq: REVU) has been a pioneer and leader in helping
students achieve their higher education goals for more than 25 years through
college and graduate school test preparation and private tutoring. With more
than 165 print and digital publications and a free website,
www.PrincetonReview.com, the Company provides students and their parents with
the resources to research, apply to, prepare for, and learn how to pay for
higher education. The Princeton Review also partners with schools and guidance
counselors throughout the U.S. to assist in college readiness, test
preparation and career planning services, helping more students pursue
postsecondary education.

About Penn Foster
Penn Foster College, Penn Foster Career School, and Penn Foster High School
are part of Penn Foster, Inc., a global leader in online education. For more
than 118 years, Penn Foster has been providing accredited career-focused
degree and vocational programs in the fields of allied health, business,
technology, education, and select trades. Nationally and regionally accredited
Penn Foster High School (www.PennFosterHighSchool.com) and Penn Foster Career
School (www.pennfoster.edu) are headquartered in Scranton, PA, with regional
offices in Montreal, Canada. Penn Foster College is headquartered in
Scottsdale, Arizona.

Safe Harbor Statement
All statements in this press release that are not historical are
forward-looking statements within the meaning of Section 21E of the Securities
Exchange Act of 1934. Such forward-looking statements may be identified by
words such as "believe," "intend," "expect," "may," "could," "would," "will,"
"should," "plan," "project," "contemplate," "anticipate," or similar
statements. These statements relate to future events or future performance,
including with respect to the proposed transaction with Penn Foster and the
expected benefits therefrom. Because these statements reflect The Princeton
Review's current views concerning future events, these forward-looking
statements are subject to risks and uncertainties. The Princeton Review's
actual results could differ materially from those anticipated in these
forward-looking statements as a result of many factors, including, but not
limited to, satisfaction of closing conditions for the acquisition and related
financings; the possibility that the acquisition or related financings will
not be completed, or if completed, not completed on a timely basis; demand
for the company's products and services; the company's ability to compete
effectively and adjust to rapidly changing market dynamics; the timing of
revenue recognition from significant contracts with schools and school
districts; market acceptance of the company's newer products and services;
continued federal and state focus on assessment and remediation in K-12
education; the Company's ability to assimilate and integrate certain of the
operations of Penn Foster; unanticipated acquisition related costs and
negative effects on our reported results of operations from
acquisition-related charges; our ability to achieve expected synergies and
operating efficiencies in the acquisition within the expected time-frames or
at all; the potential negative effects from the substantial amount of
outstanding indebtedness to be incurred to finance the acquisition; the
ability to meet debt service requirements; availability and terms of capital,
including following the transaction; liquidity uncertainties; and the other
factors described under the caption "Risk Factors" in The Princeton Review's
most recent Forms 10-K and 10-Q filed with the Securities and Exchange
Commission. The Princeton Review can give no assurance that the acquisition
will be completed or that the conditions to the acquisition will be satisfied.
The Princeton Review undertakes no obligation to update publicly any
forward-looking statements contained in this press release.

REVU-G

SOURCE The Princeton Review

Investors: Steve Richards, The Princeton Review, +1-508-663-5053,
SRichards@Review.com, Media: Alex Stanton, Stanton Public Relations &
Marketing, +1-212-780-0701, AStanton@StantonPRM.com