The Associated Press reports that Massachusetts-based Princeton Review Inc. is selling its test prep business for a meager $33 million in cash to a private equity group called Charlesbank Capital Partners. Meanwhile, the remaining assets of Princeton Review will change its name and focus on its Penn Foster online education business.   The company has seen its stock price slide to as low as 7 cents per share in the past year, down from $4.50 per share in 2009.

The Massachusetts-based company is best known for the test preparation materials that it sells under the Princeton Review brand which is also being sold as part of the deal to an affiliate of the private equity firm Charlesbank Capital Partners. The company’s test prep business has struggled as customers are opting for less expensive SAT-preparation programs.

The deal announced Tuesday is expected to close within 30 to 45 days. Princeton Review said the sale will help it expand its Penn Foster division, which provides online degrees and vocational programs in fields like health care, technology and education. It will adopt a new name, as yet undetermined.

Via The Associated Press

Meanwhile, a rival test prep firm gives the following analysis of the demise of The Princeton Review and the uphill battle it made against Kaplan back in the 1980s.

While the TPR name will live on, this truly marks the end of an era. Under the leadership of John Katzman, who founded the company in 1981 after graduating from Princeton University (the company has never been affiliated with the school), TPR quickly rose to become the first national challenger to Kaplan, which by the 1980s had become by far the largest test prep company in America. Katzman stayed at the helm until 2008, by which time the company had lost much of its magic but still had a very recognizable brand name….

After receiving a $60 million infusion from Bain Capital Ventures and another private equity firm in 2007, the company embarked on an ambitious makeover plan, including buying up its regional franchises. While bringing the franchises in-house made sense in a lot of ways, in some ways TPR’s timing couldn’t be worse: The company was doubling-down on its brick-and-mortar business just as more and more test preparation moved to an online delivery format. The proliferation of lower-priced online test prep options made it hard for the company to maintain its large footprint and keep investing in its core businesses at the same time.

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(Fun fact: Did you ever wonder why Kaplan uses the domain kaptest.com in addition to kaplan.com? Back in 1994, when the World Wide Web was very much still the Wild West and domains such as pepsi.com and mcdonalds.com were still available for anyone to register, TPR registered kaplan.com and set up its own site at that address. After a precedent-setting lawsuit, TPR finally handed over the domain to Kaplan, but not before Kaplan had started using kaptest.com for its own services. TPR famously offered Kaplan the domain name in exchange for a case of beer in a display of the fun and seemingly younger culture of TPR at the time, but Kaplan didn’t find it funny.)

Via Veritas Prep Blog