Chronologyof Edison Project Funding
1999
In July, the Edison Projectchanged its name to "Edison Schools, Inc." [16]
In August, Edison filedwith the Securities and Exchange Commission to make an initial public offeringof $172.5 million in stock. [18]The filing revealed that Edison had accumulated losses of $112 million as of 1March 1999, [19] and had lost$20.7 million in the nine-month period ending 31 March 1999. [20]
1998
In
May, Edison executivevice president Chris Cerf said that a planned
expansion in 1999 would add 22new schools. Cerf reported that the
expansion would bring Edison to"static-state profitability," the point
at which the company wouldbecome profitable if it stopped growth
expenditures. [13]
In
October, the EdisonProject obtained $56 million of private equity
financing, bringing the totalraised since 1991 to $161 million. Two
companies, J.P. Morgan CapitalCorporation and Investor AB of Sweden,
invested $20 million each, with theremainder coming from WSI Inc. (a
holding company controlled by Chris Whittle)and Richmont Leeds
Education Company, an education industry investmentcorporation. With
the new financing, Edison projected that by 2001 it willincrease the
number of schools it manages to 75. [14]
Also
in October, Edisonannounced that it will offer stock options to staff
members of its Miamischool. Teachers, administrators, and other school
staff will have an option tobuy a limited amount of stock when the
company goes public. [15]
1997
The
Edison Projectannounced it will seek $50 million from the private
equity market andconsidered an initial public stock offering which the
company expected wouldraise $75-100 million. [12]
1996
In
November, the EdisonProject completed a private $30.5 million
financing, the third time thatWhittle had been able to solicit major
private investment. Investors includedRichmont Leeds Education Company
LLC; J.W. Childs Associates, LP; ZesigerCapital Group LLC; and
Christopher Whittle, who remained the company's largestequity holder. [11]
1995
In
February, Edison securedthe financing for its first for-profit public
schools, scaling back its plansto open more than a dozen schools in
fall 1995 to five or fewer. Investorsagreed to commit less than $10
million for the first year; a second installmentfor 1996 was planned
but not guaranteed, representing a total package of lessthan $30
million. Investors included the Sprout Group, a venture capital
groupowned by Equitable Company's Donaldson, Lufkin & Jenrette
SecuritiesCorporation. [9]
As part of thearrangement, Christopher Whittle was forced to share
chairmanship of thecompany with Janet Hickey, a Sprout representative. [10]
1994
In July Edison announced itwill try to raise a minimum of $50 million to support the new network ofschools. [7]
Later in the year,Whittle Communications collapsed and Whittle sold
Channel One, his onlyprofitable product, to K-III Communications (now
Primedia) for $300 million.[8]
1993
Whittle
reduced the scopeof the planned Edison Project, from opening a network
of private schools, tomanaging 20 public schools. While Whittle
Communications secured approximately$40 million from two of its major
investors, Philips Electronics NV andAssociated Newspaper Holdings, [4]Whittle himself was removed from daily operations at Whittle Communications bythose same investors. [5] TimeWarner, Inc., an initial financial backer declined to commit any more funds tothe effort. [6]
1992
A
group of educators andbusiness people, led by former Yale University
president Benno Schmidt, spentthe year developing the Edison school
curriculum. [3]
1991
Media
entrepreneurChristopher Whittle, founder of Whittle Communications and
creator of thecontroversial Channel One in-school news program,
introduced his Edison Projectidea. He planned to build 1,000 new,
for-profit schools, 200 of them withinfive years, at a projected cost
of $2.5 billion. [1]
Footnotes
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