Education Management Corporation to Acquire American Education Centers and Affiliated Schools

Education Management Corporation (Nasdaq: EDMC) today announced that it has signed an agreement to purchase American Education Centers and its affiliated schools (AEC) (www.aec-education.com) for $112.5 million in cash and assumption of $3.5 million of debt.

AEC, with approximately 5,800 students currently, offers diploma and associate's degree programs in health sciences, business, information technology, legal studies, and design technologies. The acquisition is expected to close in September and is subject to customary conditions, including regulatory approvals. It is expected to be accretive to EDMC's earnings in the fiscal year ending June 30, 2004.

AEC is headquartered in a suburb of Cincinnati, Ohio, and operates 18 education institutions in eight states. Its academic programs include medical assisting, licensed practical nursing, occupational therapy assisting, physical therapy assisting, business management, accounting, network engineering, computer applications, computer programming, electronics engineering, paralegal studies, criminal justice, audio-video production, and computer-aided design.

AEC and its affiliates are controlled by The Palmer Group, a private investment firm based in Philadelphia, Pennsylvania, headed by Russell E. Palmer, former Managing Partner and CEO of Touche Ross Co. (now Deloitte & Touche) and former Dean of the Wharton School of the University of Pennsylvania.

Robert B. Knutson, Chairman and Chief Executive Officer of EDMC, said:

"The acquisition of AEC, with the staff, faculty and management in place, is an important step in executing our strategy of creating a broad range of market-sensitive academic programs and a comprehensive distribution system. We see a number of opportunities to introduce other academic programs of the EDMC system to AEC's campuses, subject to normal regulatory approvals."

J. William Brooks, American Education Centers' CEO, said:

"We have taken great pride in the fact that our schools give students the knowledge and skills required by a more demanding workplace, and at the same time add value to the companies that hire them. EDMC's reputation and expertise in offering degree-level academic programs will support our growth objectives."

Mr. Brooks will remain with American Education Centers as its President after the closing and will become an Executive Vice President and member of the Management Committee of EDMC.