Shares of for-profit vocational school chain Career Education Corp. rose on Monday after the company said that it had sold its Istituto Marangoni business, which provides fashion and design programs, and authorized $100 million for a stock buyback program.
Shares rose 56 cents, or 7.3 percent, to close at $8.26 Monday. They've dropped 60 percent this year as the school's enrollments shrink, its CEO abruptly resigned and the company disclosed improper job-placement practices that could result in sanctions.
Career Education said Monday that an investor group led by private equity firm Providence Equity Partners bought its Istituto Marangoni business because the division was "not core" to its long-term strategy in Europe. Financial terms were not disclosed, but the Schaumburg, Ill., company said it expects to book a gain of $17 million to $20 million as a result of the sale.
Istituto Marangoni is headquartered in Milan, with other locations in Paris and London.
Meanwhile, the $100 million Career Education said its board authorized on Monday for stock repurchases is in addition to the $153.3 million still available under a previously authorized program.
Shrinking the number of stock outstanding can make each share more valuable and give a boost to earnings per share.