With the massive share buyback and low PE, if I were management and/or a few of the big insitutionals that hold a position, I would look at taking this company private. Call up a PE firm. I know the industry is down, but if it has bottomed, now is the time to buy.
Has this been done in the education sector (taking a public company private)? Then lay low for a couple of years and shape this thing to take public again in a few years or sell out to one of the bigger players like the Apolo Group.
You bring up a good point and something that I have though about in the past on ESI. Who wouldn't think about it since a takeover of ESI could be so easily financed and pay off hugely for a PE firm.
This would have been done long ago if it were not for one difficulty. In the United States, the education regulations require that whenever ownership of a school changes that school must be re-accredited. A full takeover of ESI means that every single one of its schools would have to go through this process. Getting accredited is not trivial and takes alot of preparation, time, and money. All sorts of education administrators and accrediting experts descend upon the school, perform detailed audits, make recommendations that then have to be implemented, and so on and so forth. Most PE firms are simply not equipped to deal with this. The PE firms want to cut costs, move fast, leverage up, and sell out. Doing a system wide massive re-accrediting is simply too burdensome for them.
Thus, no PE buyout.
That said, however, shareholders are in effect already being bought out - they are being bought out by the company itself. It is just not in one fell swoop at a big premium like a PE firm would do. ESI has been buying back its stock hugely (share count is down from 40 million in 2008 to 23 million now - and another 7.8 million on the way in the current share buyback authorization). Anyone wants to look at a similar buyback situation can look at Autozone (AZO). By my calculations ESI shares will be 100% retired in 6 years "if earnings hold around current levels" (and as the shorts would say, that may well be a big "if").