Continuing the private equity community's love affair with schools and education related companies, Leeds Equity Partners recently announced that it has agreed to buy publicly traded Nobel Learning Communities (NASDAQ: NLCI) and take it private in a $149 million transaction. Nobel Learning operates private preschools, elementary schools, middle schools and K-12 online distance learning across the country.

Leeds Equity Partners has offered to pay Nobel's stockholders $11.75 in cash per share of common stock, which represents a 36% premium. Approximately 55% of the company's shareholders have agreed to vote in favor of the transaction.

This is just the latest in a series of education related transactions.  Since the end of 2008, 55 private equity firms have invested in 73 companies involved in the education services industry, according to PitchBook. Deal activity in the education space slowed a bit in 2010 dropping from 38 deals in 2009 to 27 last year, but the deals in 2010 were typically larger than those the previous year. The median deal size in 2010 was $75 million, up from $30 million in 2009.  With 9 deals completed so far this year, 2011 is experiencing similar transaction volume as last year.

Private equity investors have a strong preference for controlling stakes in education, training and post secondary companies, preferring straight buyouts compared to minority investments. The most active private equity investors in education related companies and post-secondary schools include The Riverside Company (with 6 deals), Hart Capital (with 5 deals), Spire Capital Partners (with 4 deals) and Sterling Partners (with 4 deals).

If you own a for-profit school, training or tutoring company and would like to understand your options, contact John Parnell, head of MidCap's Education Specialty Practice Group.