Mosaic Technologies Corp. Tuesday said it will offer to purchase the assets of financially troubled Information Technology Institute (ITI), potentially salvaging the education of 1,300 students currently learning in limbo.
Mosaic president and CEO Don Whitty said the company would offer a letter of intent as well as a proposal to ITI’s receiver, Ernst & Young by noon Wednesday, the deadline imposed for prospective buyers to make their interests known.
“We see this as complimentary content to the content we already deliver in our schools,” said Whitty. Mosaic’s business consists of multimedia-focused training centres in four Canadian cities, corporate training, and its own software-training programs.
But not all ITI students were fashioning Fredericton-based Mosaic as a white knight riding in to ensure the schools stay open.
Douglas Campbell, a student at ITI in Toronto, greeted the news with a healthy dose of skepticism.
“It’s just another step in the spiel we’ve been hearing over the past couple of weeks,” Campbell said.
On August 16, Nova Scotia’s Supreme Court ordered Ernst & Young to assume control of ITI’s Halifax headquarters and its six Canadian and three American training centres. Since then, Campbell said, ITI’s administration has to been slow to provide any concrete information to the students about the school’s ability to continue functioning, or the fate each student’s $25,000 investment.
“In terms of the moods of the students, I’d have to say some are frustrated,” he said.
But Whitty expressed only optimism for ITI should Mosaic’s offer be accepted. He said ITI’s problems were not related to educational proficiency or its ability to attract students, but to its problem-plagued expansion into the United States and its ability to control costs.
“It’s very basic economics; their expenditures exceeded their revenues,” Whitty said, noting especially high overhead related to ITI’s administration, marketing and curriculum development.
“I think some attention to those areas should be able to bring them back to profitability immediately.”
Whitty said Mosaic has a track record of maximizing efficiencies afforded by owning a number of schools, and that he would expect the pattern to continue should Mosaic gain control of ITI. Two weeks ago, Mosaic announced its fifth straight profitable quarter.
While Mosaic’s schools in Vancouver, Winnipeg, Calgary and the recently-acquired ICT institute in Regina focus more on multimedia design that IT training, Whitty said education in Java, Visual Basic and database design is common to both curriculums.
“We’ve bought things that either lost money or were marginal, and we’ve improved the product. Every single one of our schools makes money,” Whitty said. “We think the ITI approach can make money for us.”
Whitty admitted ITI’s woes might have in part stemmed from a crowded IT training market, but said he was still optimistic about future needs for IT employees and by extension, IT training.
“I think there’s still a lot of opportunities,” he said.
Bruce McKelvey, president and CEO of Toronto-based CDI Education Corp. shares Whitty’s bright-eyed view of the IT-training market.
“Like any business, there are cycles where certain organizations leave and enter the market,” McKelvey said. McKelvey declined comment on whether CDI was interested in submitting an offer for ITI. But he did say CDI is “very bullish in terms of opportunities in the post-secondary education area and the corporate training area.”
In June, CDI entered into an agreement to acquire business and health care training company International Business Schools, which includes the Toronto School of Business and CompuCollege School of Business in British Columbia. McKelvey said about 30 per cent of IBS’s curriculum is devoted to IT training.