UPDATE 1-First Marblehead to buy educational outsourcing firm

* To buy Tuition Management Systems for $47.3 mln in cash

* Deal to add $31 mln rev to oper results yearly

* Acquisition to be cash positive in first yr

* TMS to add to earnings from second year

Nov 22 (Reuters) - Student loan securitizer First Marblehead Corp (FMD.N) agreed to buy Tuition Management Systems (TMS), a provider of outsourcing services for educational institutions, from KeyBank National Association for $47.3 million in cash.

Warwick, Rhode Island-based TMS -- which offers tuition planning, billing, counseling and payment technology services -- operates in 47 states and serves over 1,200 school clients. It processed $3.7 billion in tuition and related payments last year.

The acquisition is expected to add about $31 million in total revenue to First Marblehead's operating results on a yearly basis.

The deal, which is expected to close before Jan. 1, will be cash flow positive during the first year and add to earnings from the second year, First Marblehead said.

First Marblehead, which will assume certain liabilities of the business as part of the acquisition, may be entitled to a payment of up to $1.25 million from KeyBank based on the operating performance of TMS through June 1, 2011. TMS, which has about 170 employees, will retain its separate brand identity, management team and operations, First Marblehead said.

First Marblehead shares were trading up 1 percent at $2.10 on Monday on the New York Stock Exchange. They have dropped more than 10 percent since Nov. 4, when the company posted a first-quarter loss that disappointed the Street as provision for loan losses more than doubled. [ID:nSGE6A30NK] (Reporting by Archana Shankar in Bangalore; Editing by Anne Pallivathuckal)