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Summer Street Capital buys welding school based in Oklahoma

Summer Street Capital Partners has acquired a Tulsa, Okla., welding school in what the Buffalo private-equity firm's executives said Monday could be the first in a series of deals involving the career school industry.

Summer Street purchased the Tulsa Welding School, which has campuses in Tulsa and Jacksonville, Fla., and is the largest accredited private welding school in the United States, with more than 800 students.

"We're definitely planning to do related acquisitions in not only the trade school area but in the medical training school area," said Michael McQueeney, Summer Street's managing partner.

McQueeney heads a new investment team that Summer Street formed to seek potential investments within the career school industry, focusing primarily on specialized schools that train workers in higher-income fields. Those fields range from welding, plumbing and heating, ventilation and air conditioning to medical careers, such as registered and licensed practical nursing, and stenography, he said.

"It's a growth industry," McQueeney said. "It's recession-resistant and could be a recession growth industry."

McQueeney said Summer Street was drawn to the career school industry because demand is rising for many skilled trades, such as welding, while the troubles within the nation's manufacturing sector and a potential recession could displace many workers who need to learn new skills to find a good-paying job.

Summer Street, which was joined as investors in Tulsa Welding by HSBC Capital and the school's incoming management, said it plans to add 80 additional welding machines to the school's two campuses. McQueeney said the new owners also will look into the feasibility of opening a third campus in the western United States.

Owning a series of career schools also creates the opportunity to add specialized programs at the different campuses. For instance, heating, ventilation and air conditioning programs could be added at a welding school, and vice versa, McQueeney said.

"You can cross-fertilize programs," he said.

The terms of the deal were not disclosed, although Summer Street typically invests $5 million to $30 million in companies with annual revenues of $20 million to $100 million a year.

For its career school industry investments, Summer Street plans to focus on institutions with $2 million to $50 million in annual revenues.


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