Career Education Corporation and EduTrek International, Inc. Sign Definitive Merger Agreement; CECO To Expand Global Presence, Launch University Division.

Business Editors

HOFFMAN ESTATES, Ill. & ATLANTA--(BUSINESS WIRE)--Oct. 24, 2000

Career Education Corporation (NASDAQ: CECO) and EduTrek International, Inc. (OTC BB: EDUT) today announced they have signed a definitive merger agreement under which Career Education Corporation will acquire all of the shares of EduTrek. The transaction will significantly enhance CEC's position as one of the world's largest quality providers of private, for-profit postsecondary education.

Under the terms of the agreement, EduTrek's shareholders will receive an aggregate of 1.2 million shares of Career Education Corporation stock (approximately 0.09 shares of CEC stock for each share of EduTrek stock) and $2.5 million in cash (approximately $0.19 per share). There are approximately 13.32 million EduTrek shares outstanding. Career Education Corporation also will fund approximately $37.0 million in assumed EduTrek debt and other obligations.

The transaction is expected to close late in the fourth quarter of 2000 or in the first quarter of 2001. Completion of the acquisition is subject to a number of conditions, including regulatory and EduTrek shareholder approvals. Steve Bostic, chairman and chief executive officer of EduTrek International, Inc., and another major shareholder have each agreed to vote their EduTrek shares in favor of the merger, which shares represent over 90% of the votes available.

EduTrek owns and operates American InterContinental University (AIU). Founded in 1970, AIU has seven campuses located in Atlanta (Buckhead and Dunwoody), Dubai, Ft. Lauderdale, London, Los Angeles and Washington D.C., with approximately 4,500 students. The University is accredited by the Commission on Colleges of the Southern Association of Colleges and Schools (SACS).

"Career Education Corporation and American InterContinental University are an ideal strategic combination," said John M. Larson, chairman, president and chief executive officer of Career Education Corporation. "AIU is an outstanding university system primarily delivering bachelor's and master's degrees in three of the four core curricula CEC offers, including visual communication and design technologies, information technology and business studies. The acquisition of AIU opens new opportunities for CEC to offer a wider range of degree options to meet the needs of a broader student population.

"AIU also will expand CEC's geographic presence to include several new major markets in the United States, and will extend our international reach beyond Canada to the United Kingdom and United Arab Emirates. With CEC's 30 campuses and AIU's seven campuses, we will have a significant presence in the markets where the new economy is driving increasing demand for the type of career training we provide," Mr. Larson said.

"I am pleased that AIU will be part of the CEC family," said Steve Bostic, chairman and chief executive officer of EduTrek International, Inc. "Career Education Corporation has a proven track record of acquiring top academic institutions and fostering growth through investments in curricula, staff, student services, facilities and marketing programs. AIU will advance its mission to serve the higher education needs of traditional students, working adults and international students."

AIU offers a variety of international study programs, including a Study Abroad Program. During 1999, more than 800 students from universities across the U.S. earned academic credit from their home university by enrolling at AIU's London and Dubai campuses.

"EduTrek has a number of strategic assets that will help accelerate CEC's growth," Mr. Larson said. "We plan to apply the same approach that has proved successful at every school we have acquired to date - investing in growth opportunities while creating operating efficiencies through economies of scale - to realize the full potential inherent in the AIU franchise."

According to Mr. Larson, CEC plans to establish a University Division, under which AIU will operate. "There are numerous growth opportunities for AIU, including expansion into new geographic markets, the referral of current CEC students and graduates to AIU's advanced degree programs, and the introduction of distance learning," he said.

The transaction is expected to be tax-free to both companies and their respective shareholders, except for the cash consideration which may be taxable to EduTrek's shareholders. The transaction will be accounted for under the purchase method of accounting. CEC remains confident that it will be able to meet or exceed current consensus analyst estimates for earnings per share even though the transaction will be dilutive to CEC in 2001. Earnings per share attributable to the merger are expected to become accretive in 2002. Career Education Corporation used Credit Suisse First Boston Corporation as a financial advisor for the merger. EduTrek International, Inc. used The Robinson-Humphrey Company, LLC as a financial advisor for the merger.

Career Education Corporation will host a conference call with financial analysts on Wednesday, October 25, 2000 at 10:00 a.m. (Eastern Daylight Time) to discuss the EduTrek merger. Interested parties can listen to the conference call live through the Internet at www.vcall.com, or by calling [phone]. Following the conference call, a rebroadcast will be available for 90 days at www.vcall.com, or for seven days by calling [phone] and citing confirmation code 730269.

Career Education Corporation is one of the largest providers of private, for-profit, postsecondary education in North America. The Company currently operates 30 campuses in 15 states and two Canadian provinces. CEC schools enjoy long operating histories and offer a wide variety of bachelor's degree, associate degree and diploma programs in career-oriented disciplines within the Company's core curricula of visual communication and design technologies, information technology, business studies and culinary arts.

Additional Information:

Except for the historical and present factual information contained herein, the matters set forth in this release, including statements as to the expected date of the closing of the merger, future financial and operating results, expected benefits and synergies of the merger, tax and accounting treatment of the merger, future opportunities and any other effect, result or aspect of the proposed transaction and any other statements identified by words such as "expects," "projects," "plans," and similar expressions are forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties, including, but not limited to, costs and difficulties related to the integration of acquired businesses, costs, delays, and any other difficulties related to the merger, failure of the parties to satisfy closing conditions, risks and effects of legal and administrative proceedings and governmental regulations, future financial and operational results, competition, general economic conditions, ability to manage and continue growth, risks of international operations and other risk factors relating to our industry as detailed from time to time in each of Career Education Corporation's and EduTrek's reports filed with the SEC. Career Education Corporation and EduTrek disclaim any responsibility to update these forward-looking statements.

Career Education Corporation will file a prospectus and other relevant documents concerning the proposed merger transaction with the SEC. EduTrek will file a proxy statement and other documents concerning the proposed merger transaction with the SEC. Investors are urged to read the proxy statement and the prospectus when they become available and any other relevant documents filed with the SEC because they will contain important information. You will be able to obtain the documents free of charge at the website maintained by the SEC at www.sec.gov. In addition, you may obtain documents filed with the SEC by Career Education Corporation free of charge by requesting them in writing from Career Education Corporation, 2895 Greenspoint Parkway, Suite 600 Hoffman Estates, Illinois 60195 Attention: Investor Relations Department, or by telephone at [phone]. You may obtain documents filed with the SEC by EduTrek free of charge by requesting them in writing from EduTrek Inc., 6600 Peachtree-Dunwoody Road, Embassy Row 500 Atlanta, Georgia 30328 Attention: Office of Corporate Secretary, or by telephone at [phone].

EduTrek, and its directors and executive officers may be deemed to be participants in the solicitation of proxies from the stockholders of EduTrek in connection with the merger. Information about the directors and executive officers of EduTrek and their ownership of EduTrek stock is set forth in the proxy statement for EduTrek's 2000 annual meeting of stockholders. Investors may obtain additional information regarding the interests of such participants by reading the proxy statement and the prospectus when they become available.

Investors should read the proxy statement and the prospectus carefully when they become available before making any voting or investment decisions.