UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 13D
Under the Securities Exchange Act of 1934
(Amendment No. )*
LAUREATE EDUCATION, INC.
_______________________________________________________
(Name of Issuer)
COMMON STOCK
_______________________________________________________
(Title of Class of Securities)
518613104
_______________________________________________________
(CUSIP Number)
Henry H. Hopkins
T. Rowe Price Associates, Inc.
100 East Pratt Street - 8th Floor
Baltimore, Maryland 21202
410-345-6640
_______________________________________________________
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
March 2, 2007
_______________________________________________________
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition that is the subject of this
Schedule 13D, and is filing this schedule because of Sections
240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following
box. X
NOTE: Schedules filed in paper format shall include a signed
original and five copies of the schedule, including all exhibits.
See Section 240.13d-7 for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a
reporting persons initial filing on this form with respect to
the subject class of securities, and for any subsequent amendment
containing information which would alter disclosures provided in
a prior cover page.
The information required on the remainder of this cover page
shall not be deemed to be filed for the purpose of Section 18 of
the Securities Exchange Act of 1934 (Act) or otherwise subject to
the liabilities of that section of the Act but shall be subject
to all other provisions of the Act (however, see the Notes).
CUSIP No. 518613104
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
T. ROWE PRICE ASSOCIATES, INC.
52-0556948
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) NOT APPLICABLE
(b) NOT APPLICABLE
3 SEC USE ONLY
_________________________________________
4 SOURCE OF FUNDS*
OTHER
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
MARYLAND
Number of 7 SOLE VOTING POWER 844,000
Shares
Beneficially 8 SHARED VOTING POWER NONE
Owned By Each
Reporting 9 SOLE DISPOSITIVE POWER 4,233,402
Person
With: 10 SHARED DISPOSITIVE POWER NONE
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,233,402
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.1%
14 TYPE OF REPORTING PERSON*
1A
*SEE INSTRUCTIONS BEFORE FILLING OUT!
Item 1. Security and Issuer.
This Statement relates to shares of common stock (the
Common Stock)of Laureate Education, Inc. (the Issuer). The
Issuers principal executive offices are located at 1001 Fleet
Street, Baltimore, Maryland 21202.
Item 2. Identity and Background.
(a) - (c), (f) This statement is being filed by T. Rowe
Price Associates, Inc., a Maryland corporation (the Adviser),
with its principal business office being located at 100 East
Pratt Street, Baltimore, Maryland 21202. The Adviser is
registered as an investment adviser under the Investment Advisers
Act of 1940, as amended, and is engaged in the business of
rendering investment advisory, sub-advisory and supervisory
services to investment companies (the Funds) registered under the
Investment Company Act of 1940, as amended, as well as to
individually managed accounts for institutional and other clients
(the Accounts).
Attached as Schedule A hereto and incorporated herein
by reference is a table setting forth officers and directors of
the Adviser and the business address, principal occupation and
citizenship of each such person. The Advisor is a wholly-owned
subsidiary of T. Rowe Price Group, Inc., a public corporation.
(d) During the last five years, neither the Adviser
nor any of the specifically named persons listed on Schedule A
hereto has been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors).
(e) During the last five years, neither the Adviser
nor any of the specifically named persons listed on Schedule A
hereto has been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or
finding any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
The 4,233,402 shares of Common Stock heretofore
acquired
on behalf of Funds and Accounts managed by the Adviser on a
discretionary basis were acquired for the aggregate purchase
price of $149,980,845.43 including brokerage commissions, using
the cash reserves of the respective Funds and Accounts.
Item 4. Purpose of the Transaction.
On behalf of the Funds and the Accounts, the Adviser
acquired and continues to hold the shares of Common Stock for
investment purposes. However, in order to protect the best
interests of the Funds and Accounts, the Adviser may consider
alternative courses of action which may be available in light of
the Issuers recent announcement to accept a buyout proposal of
$60.50 per share from a group of investors, led by the Issuers
Chairman and Chief Executive Officer, Douglas Becker (the
Proposed Transaction).
Accordingly, the Adviser intends to communicate with the
Issuers Board of Directors, management, other shareholders, or
any other interested persons to oppose the Proposed Transaction
and determine what alternative courses of action may better serve
the interests of the Funds and Accounts. To that end, on March
2, 2007, the Adviser sent a letter (attached as Exhibit 1) to the
Board of Directors of the Issuer expressing its dissatisfaction
with the consideration being offered public shareholders in the
Proposed Transaction and outlining a number of factors which the
Board should consider in re-evaluating the buyout consideration.
The letter urges the Board to reconsider its approval of the
Proposed Transaction and states that the Adviser will not support
the Proposed Transaction as, in its view, the buyout
consideration does not adequately reflect the value of the
Issuers current franchise and growth prospects.
Except as specifically set forth herein, neither the
Adviser nor any of the persons listed on Schedule A has any
present plans or proposals which relate or would result in any of
the events listed in paragraphs (a) through (j) of Item 4 of
Schedule 13D. Adviser intends to review its investment in the
Issuer on a continuing basis and may engage in discussions with
management, the Board of Directors, other shareholders of the
Issuer, the press and other relevant parties concerning the
Proposed Transaction and potentially concerning other matters
with respect to the Advisers investment in the Shares, including,
without limitation, the business, operations, governance,
management, strategy and future plans of the Issuer. Depending on
various factors, including, without limitation, the status of the
Proposed Transaction and the apparent level of shareholder
support therefor, the terms of any alternative transactions that
may be proposed, the Issuers financial position and strategic
direction, the outcome of any discussions referenced above,
actions taken by the Board of Directors, the market price of the
Shares, the availability of other investment opportunities,
conditions in the securities market and general economic and
industry conditions, the Adviser may in the future take such
actions with respect to its investment in the Issuer as it deems
appropriate including, without limitation, purchasing additional
Shares, selling some or all of the Shares, or changing its
intentions with respect to any and all matters referred to in
Item 4.
Item 5. Interest in Securities of the Issuer.
(a) The Adviser has investment discretion with respect
to each of the Accounts and the Funds and the investment
decisions with respect to each Account or Fund are made
separately. By virtue of its authority to dispose or direct the
disposition of the shares of Common Stock owned by or on behalf
of the Accounts and Funds, the Adviser may be deemed to
beneficially own, within the meaning of Rule 13d-3(a) under the
Securities Exchange Act of 1934, all such shares, or an aggregate
of 4,233,402 shares or 8.1% of the shares of Common Stock
outstanding (see paragraph (b) of this Item 5). Each Account and
Fund may terminate the grant of discretionary authority to the
Adviser at any time. As of the date hereof, an aggregate of
439,500 shares of Common Stock of the 51,855,000 shares of Common
Stock issued and outstanding as of January 28, 2007 (according to
the Agreement and Plan of Merger filed with the Issuers Form 8-K
on that date) are held by private Accounts managed by the
Adviser. Six Funds managed and serviced by the Adviser and its
affiliates (the Adviser-sponsored Funds) hold 3,335,802 shares of
Common Stock, and the remaining 458,100 shares of Common Stock
are held by seven Funds sponsored by other financial institutions
that have appointed the Adviser as subadviser (the Subadvised
Funds).
(b) The Adviser has sole power to vote or direct the
vote of Accounts and Subadvised Funds holding an aggregate of
844,000 shares of Common Stock. Each Adviser-sponsored Fund
votes or directs the vote of the shares of Common Stock owned by
it and the Adviser has no authority to vote any such shares; but
the personnel making the decision with respect to the voting of
shares owned by each Fund are also officers or employees of the
Adviser.
As discretionary adviser to the Accounts and the Funds, the
Adviser has the authority to dispose or to direct the disposition
of all shares of Common Stock in the portfolio of each such
Account or Fund. Such authority is subject, in the case of both
the Accounts and the Funds, to each clients right to terminate
the advisory relationship and revoke the discretionary authority,
and, in the case of the Funds, to the general supervision of each
Funds Board of Directors or Trustees.
(c) The purchases and sales executed within the last 60
days are shown below, along with the trade date, number of
shares, and the price per share.
Trans Code Number of Shares Price per Share Trade Date
S 5,000 $51.1200 01/16/2007
B 200 51.6050 01/18/2007
S 3,600 53.5760 01/24/2007
S 600 60.0767 02/02/2007
B 500 60.0075 02/06/2007
B 200 59.5855 02/14/2007
B 400 59.7500 02/15/2007
S 900 59.9215 02/16/2007
B 2,000 59.5476 02/20/2007
All such transactions were effected in the secondary market
through broker-dealers or an electronic trading network.
(d) The Adviser does not serve as custodian of the
assets of any of the Accounts; accordingly, in each instance only
the Account or the Accounts custodian or trustee bank has the
right to receive dividends paid with respect to, and proceeds
from the sale of, the shares of Common Stock held for the benefit
of such Account. The ultimate power to direct the receipt of
dividends paid with respect to, and the proceeds of the sale of,
shares of Common Stock is vested in each Account.
With respect to the shares of Common Stock owned by the
Funds, the Funds custodians, as appointed by the Funds Boards,
have the right to receive dividends paid with respect to, and
proceeds from the sale of, such shares on behalf of the Funds.
No other person is known to have such right or the right to
direct receipt of dividends paid with respect to, or the proceeds
of the sale of, such shares, except that the shareholders of each
Fund participate proportionately in any dividends and
distributions so paid.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the Issuer.
Not applicable.
Item 7. Material to Be Filed as Exhibits.
1. Letter dated March 2, 2007 to the Board of
Directors of Laureate Education, Inc.
SIGNATURE
After reasonable inquiry and to the best of my
knowledge and belief, I certify that the information set forth in
this statement is true, complete and correct.
Dated: March 2, 2007
T. ROWE PRICE ASSOCIATES, INC.
By: /s/ John R. Gilner
John R. Gilner, Vice President
and Chief Compliance Officer
SCHEDULE A
DIRECTORS AND OFFICERS - T. ROWE PRICE ASSOCIATES, INC.
Listed below are the directors of T. Rowe Price Associates,
Inc.(with their respective officerships noted), all of whom are
citizens of the U.S.A. The principal occupation of each of the
directors is as an employee of T. Rowe Price Associates, Inc.,
and the business address of each is 100 East Pratt Street,
Baltimore, Maryland 21202.
James A.C. Kennedy, Director & President
Edward C. Bernard, Director & Vice President
Mary J. Miller, Director & Vice President
Brian C. Rogers, Director & Chief Investment Officer
Listed below is a director of T. Rowe Price Associates, Inc. who
is a citizen of England. The principal occupation of said
director is as an employee of T. Rowe Price Associates, Inc. and
his business address is 60 Queen Victoria Street, London, EC4N4TZ
England.
David J. L. Warren, Director
Listed below are certain other officers of T. Rowe Price
Associates, Inc., all of whom are citizens of the U.S.A. The
principal occupation of each of the officers is as an employee of
T. Rowe Price Associates, Inc., and the business address of each
is 100 East Pratt Street, Baltimore, Maryland 21202.
Kenneth V. Moreland, Chief Financial Officer
John R. Gilner, Chief Compliance Officer
Joseph Paul Croteau, Treasurer & Controller
Barbara A. Van Horn, Secretary
In addition, approximately 325 employees of T. Rowe Price
Associates, Inc. are Vice Presidents of the firm.
March 2, 2007
Exhibit 1
March 2, 2007
Ms. Isabel Aguilera
Mr. Douglas L. Becker
Mr. Wolf H. Hengst
Mr. R. Christopher Hoehn-Saric
Mr. James H. McGuire
Mr. John A. Miller
Mr. R. William Pollock
Mr. Richard W. Riley
Mr. David A. Wilson
Board of Directors
Laureate Education, Inc.
1001 Fleet Street
Baltimore, MD 21202
Ladies and Gentlemen:
We are writing on behalf of our advisory clients, who are
shareholders of Laureate Education, Inc. (LAUR), to express our
opposition to the recently proposed going-private transaction
involving LAUR. T. Rowe Price Associates, Inc. (T. Rowe Price)
is a registered investment adviser with the U.S. Securities and
Exchange Commission under the Investment Advisers Act of 1940
with discretionary authority over the securities holdings of our
clients, including the T. Rowe Price mutual funds. Our mutual
funds and other clients hold over 4.2 million shares,
representing more than 8% of Laureates outstanding common stock
as of December 31, 2006. We have been long-term shareholders of
LAUR, having held LAUR (or its predecessor) in a variety of
client accounts since 1995.
As you are aware LAURs Chairman and CEO, Doug Becker, together
with a group of private equity firms, have proposed to take LAUR
private in a cash transaction for $60.50 per share. We believe
the proposed offer price is significantly below the true long-
term value of the company and urge the board to reconsider its
acceptance of the offer. T. Rowe Price intends to vote against
the proposed transaction as, in our opinion, it is not in our
clients best interests. We prefer to see LAUR continue to
operate as a public company so that all existing shareholders can
benefit from LAURs excellent long-term growth prospects.
It is our opinion that the long-term fair value of LAURs business
is significantly above the proposed buyout price. We believe
LAUR possesses the best-in-class assets and growth prospects in
the for-profit education sector. LAUR owns a unique global
network of campus-based and online universities operating in
Latin America, Europe, and Asia with plans to enter many
additional high growth countries in the next several years. The
majority of Wall Street analysts forecast that LAUR will have the
fastest earnings growth of any of the publicly-owned for-profit
education companies with estimated growth of 25% per year over
the next 3-5 years and at least 15-20% growth thereafter.
Despite these superior growth prospects, the proposed $60.50
buyout price values LAUR at 24 times consensus 2007 EPS
estimates, which is lower than the U.S. for-profit post-secondary
education multiple of 25 times 2007 estimated EPS.
LAUR management itself has publicly confirmed a projection of
$5.00 per share in earnings by 2010. This projection implies a
near doubling in LAURs stock price to $110 per share over the
next three years even if the stocks 2007 price earnings multiple
prior to the announcement of the proposed transaction is simply
maintained. Thus, we believe the proposed offer price of $60.50
is unfair to current shareholders because it does not take into
consideration this future growth potential and only represents a
modest premium to the prevailing market price.
In our opinion, LAURs Special Committee of independent directors
and the full board itself have not lived up to their
responsibilities to LAURs public shareholders by accepting this
offer which fails to reflect the growth opportunities which LAUR
has in place for years to come. Isnt the Boards role to focus on
and assess the long-term value of the company? Relying on
fairness opinions from Wall Street investment banking firms is
not an adequate reason to justify this offer either, in our
opinion.
We have serious concerns with how the buyout process was
conducted, including defects in the bidding process, shortcomings
in the buyout agreement itself, the collaboration of 10 private
equity firms in the transaction, and the conflict of interest
brought about by the participation in the transaction of LAURs
Chairman and CEO. Our reservations about the deal process and
the inherent conflicts also raise issues as to overall fairness
to LAUR shareholders. Our main point is that this acquisition
agreement is not in the best long-term interests of our clients
and other LAUR public shareholders as it does not nearly reflect
the value of the companys current franchise and growth
prospects. We plan to vote against the proposed acquisition and
urge you to reconsider your approval of this transaction.
We would welcome the opportunity to further discuss our views
with you.
Sincerely,
John H. Laporte Brian W. H. Berghuis