Education Management up 20.9 percent, Echo little changed

NEW YORK (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