* Education Management jumps 20.9 pct in first day
* Echo Global closes up 0.43 pct
(Adds closing prices, byline)
By Phil Wahba
NEW YORK, Oct 2 (Reuters) - Education Management Corp
(EDMC.O) rose 20.9 percent in its first day of trading on the
Nasdaq on Friday, above average for a U.S. initial public
offering this year.
The Pittsburgh-based company, which provides on campus and
online education programs in North America, priced shares for
$18 in the IPO on Thursday evening, at the bottom of the
estimated range.
Its shares closed up $3.77 at $21.77 on Friday. The average
U.S.-listed IPO this year rose 11.1 percent in its first day,
according to Thomson Reuters.
Analysts had said that Education Management shares were
likely worth more than their IPO price.
Data from advisory firm IPO Boutique compared
price-earnings ratios using a $19 price, the midpoint of the
estimate range, and found Education Management to be valued
below its main rivals such as Grand Canyon Education Inc
(LOPE.O) and Bridgepoint Education Inc (BPI.N), which have gone
public in the past year.
A research report by Morningstar said this week that
Education Management shares could be worth $23, despite still
high debt levels after the IPO.
Education Management said on Thursday the IPO would
generate $334.8 million, most of which would be used to pay off
debt.
"We forecast a compound annual growth rate of 12 percent,
which is driven by enrollment growth and tuition increases,"
the Morningstar report said.
In June 2006, Education Management was bought by a group of
private investors, led by Providence Equity Partners, Goldman
Sachs Capital Partners (GS.N) and Leeds Equity Partners, for
$3.4 billion.
These funds collectively will still own 65.5 percent of the
company after the IPO, according to a regulatory filing.
In the year ended June 30, 2009, company revenue rose 19.4
percent to $2.01 billion, with net income of $104.4 million.
Echo Global Logistics Inc (ECHO.O) which provides online
systems that manage truck, train and air shipping logistics,
also made its debut on the Nasdaq. The company's shares closed
up six cents to $14.06.
Echo Global's IPO raised $79.8 million.
(Reporting by Phil Wahba; Editing by Derek Caney, Matthew
Lewis and Carol Bishopric)
