<PAGE> 1
EXHIBIT 99.1
[The following is the text of slides being presented to investors in Strayer
Education, Inc.]
SLIDE:
Strayer Education, Inc.
November 2000
NMC DB Capital Partners
Deutsche Bank
SLIDE:
Investment Thesis
- Strayer is one of the highest quality franchises in
the education sector
- Objective: Address structural issues facing Strayer
in order to accelerate Strayer's growth and
increase its intrinsic value by:
- Resolving the uncertainty regarding Ron
Bailey's shares as he retires
- Strengthening the management team and
achieving a management succession
- Adding to the strategic vision
- Solution: A $150 million commitment to Strayer by
New Mountain Capital and DB Capital, plus the
addition of highly regarded, quality managers and a
strategic vision for growth
- Success of the transaction will benefit all
shareholders
SLIDE:
Transaction Summary
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- New Mountain Capital and DB Capital (the Investors)
will purchase $150 million of convertible preferred
stock (NMC $115, DB $35)
- 5% average coupon, 7% for the first 5
years and 3% for the last 5 years
- $26.00 conversion price
- 10 year maturity with 3 year non-call and
a 200% of conversion price floor for call
before year 5
- Payable 50% in kind (PIK) and 50% in cash
in years 1-5, then all cash thereafter
- Company will use the $150 million, plus cash on
hand, for a self-tender of up to 8.5 million shares
at $25 per share
- Company's self-tender will be available to all
shareholders on a pro-rata basis
- Ron Bailey will tender 7.2 million of his 8.2
million shares; no other tenders required as
condition to closing tender offer; Ron Bailey fully
endorses and has agreed to vote his 52% interest in
support of the Transaction
- Investors will receive 6 of 12 board seats
- New CEO and COO already recruited to be in place at
escrow closing
SLIDE:
The New Investors
- New Mountain Capital
- A leading new private equity firm, founded
by Steven B. Klinsky, formerly the most
senior partner of Forstmann, Little & Co.
outside of the Forstmann family
- Focuses on investing in, and building, the
highest quality, middle market growth
companies; education is a key area of
specialization
- DB Capital Partners, the private equity arm of
Deutsche Bank. A.G.
- Investment affiliate of one of the world's
largest financial institutions, and
leading banker (commercial banking,
investment banking, research, etc.) to the
education industry
- Global reach with operations in North
America, Europe, Asia, and Latin America
- In excess of $1 billion invested annually
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SLIDE:
The New Senior Management
- Robert S. Silberman, President and Chief Executive
Officer, 43
- President and COO, CalEnergy Company,
Inc./Mid-American
- Assistant Secretary of the Army -
Manpower
- Presidential appointment with
Senate confirmation
- Education, training and
recruitment responsibilities: 1.6
million employees
- Experience in operations, team building,
acquisitions
Scott Steffey, EVP and Chief Operating Officer, 39
- Vice Chancellor, State University of New
York (1996-2000)
- Nation's largest postsecondary
system - 400,000 students
- Increased enrollment to 40% of al
NY State high school graduates
from 28%
- Senior Division Manager, NYNEX
- $3.4 Billion revenue
responsibility for NYNEX phone
lines outside of New York City
Strayer's management team, other than Ron Bailey, will stay in place Steven B.
Klinsky, New Mountain's founder and CEO, to serve as non-executive Chairman of
the Board
SLIDE:
Postsecondary Education Industry
- For-profit postsecondary education is among the
U.S. economy's promising growth sectors
- $250 billion in 2000 spending on higher
education*
- 3x the revenue growth of traditional
schools*
- High value added for students
- Trend toward life-long learning
- Price umbrella from not-for-profit schools
- Exceptional operating margins are
achievable
- Fragmented sector with over 4,000
institutions
- Political support from both parties
- Counter-cyclical and economically
defensive
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*consultant estimate
SLIDE:
The Education Earnings Gap is Large and Widening
Bar graph showing:
4% -- No High School
9% -- Some High School
54% -- High School Only or Some College
26% -- Associate's or Bachelor's
7% -- Graduate or Professional
Line graph showing:
Difference in median earnings between High School Only and
Bachelor's Degree. Median earnings were $22,895 for High School Only and
$40,478 for Bachelor's Degree after 1995.
SLIDE:
Strayer Is An Outstanding Platform For Growth
- Strayer is a strong regional franchise with
untapped potential
- 108 year operating history, outstanding
educational reputation
- #1 in region
- More than 12,000 students
- 14 campuses in the DC, MD, and VA
area
- 39% operating margins
- 83% enrollment CAGR online (since 1997)
SLIDE:
Strayer has Demonstrated Strong, Consistent Growth
Graph showing:
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenue $11.3 $16.5 $23.8 $29.4 $34.2 $38.2 $45.0 $53.1 $62.9 $69.8
---------------------------------------------------------------------------------------------------------------------
Net Income $0.8 $2.3 $2.7 $4.4 $5.6 $7.1 $10.4 $14.4 $17.9 $19.3
---------------------------------------------------------------------------------------------------------------------
Fall Enrollment 2,900 4,000 5,600 6,200 6,800 7,400 8,200 9,400 10,400 11,500
---------------------------------------------------------------------------------------------------------------------
</TABLE>
*in millions, fiscal years ended 12/31
<PAGE> 5
SLIDE:
Strayer's High Quality Programs Are Focused on Working
Adults
- Serves adults seeking to improve career
opportunities while working fulltime: average age
is 33
- Undergraduate and graduate degree programs offered
at convenient times for working adults
- Middle States Accreditation
- Market-driven curriculum
- Many faculty members are working professionals (81%
Master's or better)
Pie chart with Student Major Profile:
56% -- Computer Information Systems & Networking
26% -- Business Admin
11% -- Other
7% -- Accounting
SLIDE:
Strayer's Business Model Delivers Exceptional Margins
- Strayer's high operating margins lead the industry
- New investors and management believe margins are
based on replicable operating fundamentals and are
sustainable
- A study done for the investors by a leading
consulting firm supports this view
- Strayer's exceptional profitability provides
opportunities for growth at high rates of return on
capital
SLIDE:
Historical Growth Strategies
- Strayer has historically pursued a conservative growth strategy
<PAGE> 6
- All operations within approximately two hour drive of
home base
- Few or no new campus openings over extended periods
- Very limited marketing for online courses
- Little or no corporate outreach
- Little or no international outreach
- No acquisitions
- Significant potential to accelerate company's growth and enhance
shareholder value
- The new investors bring vision and management critical to
success
SLIDE:
Investors' Strategic Vision for Strayer
- Preserve and protect Strayer's existing business
and academic model
- Strayer is a high margin, consistent
grower in a very attractive industry
- Maintain quality of education while
controlling costs
- Retain management and align interests of
shareholders
- Accelerate Strayer's campus revenue and profit
growth
- Step 1: Accelerate New Campus Growth
- Step 2: Maximize Online Opportunity
- Step 3: Develop Corporate/Institutional
Alliances
- Step 4: Develop International
Opportunities
- Step 5: Consider Selective Acquisitions
Focus on EPS and revenue growth
- Raise Strayer's P/E towards its peers (Apollo,
DeVry, Corinthian College)
- Execute on strategy and meet targets
- Build on credibility and relationships of
New Mountain and Deutsche Bank
- Strong focus on shareholder relations and
communications
<PAGE> 7
SLIDE:
Step 1: Accelerate New Campus Growth
- Goal of opening two to three new campuses per year
- The Washington, DC, Maryland and Virginia areas
alone could support 19 additional campuses
according to an independent consulting study
- Potential expansion into contiguous states
SLIDE:
Step 2: Maximize Online Opportunity
- Strayer believed to have nation's #1 synchronous
online program
- Real-time interactive online course
offerings represent desirable niche;
asynchronous online courses also available
- Strayer online enrollment has grown at 83%
CAGR since inception, even without
aggressive marketing
- 2020 full time and part time students
- 36% of full time online students are from
outside of DC, MD and VA
- High online operating margins justify increased
investment to accelerate growth
SLIDE:
Step 3: Develop Corporate/Institutional Alliances
- Strayer is well-positioned to exploit significant
opportunities in the $63 billion
corporate/institutional training market
- Direct outreach to corporations and institutions
- Pursue strategic relationships - team up with
smaller, local and non-accredited marketing
partners to increase Strayer's enrollment
SLIDE:
Step 4: Develop International Opportunities
<PAGE> 8
- Significant demand for American post-secondary
education overseas
- Information technology and business content (such
as Strayer's) are especially valued
- Strayer's online programs, plus its academic
accreditation and experience, equip the company to
pursue this space aggressively
- Become a college of choice for international
students who desire a U.S. degree online
SLIDE:
Step 5: Consider Selective Acquisitions
- Investors and new management have exceptional track
record in making and integrating acquisitions
- Education sector is extremely fragmented; many
private companies with limited exit options
- Strayer has potential to make a handful of
attractive acquisitions over next five years
- Buy complementary companies at attractive
prices
- Raise margins toward Strayer's
- Accelerate growth with Strayer's online
offering, scale economics, etc.
SLIDE:
Summary
- The post-secondary education market is a large,
rapidly growing and highly attractive industry
- Strayer is a high quality education company with an
excellent business model which provides a strong
base to exploit new business opportunities in the
sector
- New Mountain and DB Capital are investing $150
million in an effort to supply the capital,
management and vision needed to (i) resolve
uncertainty of Ron Bailey's shares, (ii) transition
to new senior management team, and (iii) fully
exploit the opportunities for growth and profits
available to Strayer
- If successful in executing on this vision, Strayer
should deliver substantial growth in revenues and
profits, and intrinsic value, to the benefit of all
shareholders
