Gryphon adds to education platform

Gryphon Investors, a middle market buyout firm based in San Francisco, has acquired Delta Education Systems through Gryphon’s post-secondary education platform, Gryphon Colleges Corporation. Terms of the deal were not disclosed.

Delta operates 16 accredited career colleges in Mid-Atlantic and Southern states. The schools offer training in allied health, business, cosmetology, information technology, legal and vocational trades. The company has five regional brands: Career Technical College, The Creative Circus, McCann School of Business & Technology, Miami-Jacobs Career College and Miller-Motte Technical College.

Gryphon’s education platform was formed at the end of 2004 through an acquisition of National Career Education, a holding company with schools in Arizona and California.

Joe Kennedy, founder and CEO of Delta Educational Systems, will continue to lead Delta and will also become the new CEO of Gryphon Colleges Corporation. He will replace James Berk, who transitioned from his leadership position to a board seat in January, according to a representative for the firm. Berk, a former secondary school teacher and CEO of Hard Rock Café International, had previously led GCC along with Joseph Fox, formerly of Corinthian Colleges Corporation. Both will continue to work with the company.

With the acquisition of Delta GCC will now include 20 campuses nationwide providing education to approximately 7,000 students.

David Andrews, Gryphon’s founder and managing partner, told PrivateEquityOnline last year that he sees “mega” trends in the career and for-profit post-secondary education markets. “We’ve seen an increase in the degree to which skills matter in the labor force,” he said. “We see the increase of the wage gap between skilled and low-skilled labor. Increasingly, adults are going back to school while working in order to get their credentials. Often, they’re financed by employers or the government.”

Gryphon isn’t the first private equity firm to get involved in the post-secondary education sector. Earlier this year, Providence Equity Partners and Goldman Sachs took Pittsburg-based Education Management Corp private in a $3.4 billion (€2.7 billion) deal. In 2004, TA Associates acquired Florida Career College in a $53 million recapitalization, and Cleveland-based The Riverside Company acquired the Arlington, Texas-based vocational school ATI Enterprises.