Educational services provider Princeton Review Inc said it agreed to buy online career education company Penn Foster Education Group Inc for about $170 million in cash.

Princeton expects the acquisition of Penn Foster, which is owned by the private equity firm Wicks Group of Cos, to immediately add to its cash flow generating capabilities.

For 2008, Princeton Review reported about $139 million revenue, while Penn Foster had about $90 million in revenue for the year, Princeton said in a statement.

Princeton Review plans to fund the deal through $155 million of debt financing and $30 million of equity financing, led by Bain Capital Venture Partners and Falcon Investment Advisors.

The company expects to complete the transaction before the year-end.

Penn Foster, which operates three accredited educational institutions, will function as a standalone unit and will maintain its headquarters in Scranton, Pennsylvania, Princeton Review said.

Shares of Princeton Review closed at $4.51 Friday on Nasdaq.

(Reporting by Amulya Nagaraj in Bangalore; Editing by Ratul Ray Chaudhuri)

Pennsylvania Review