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Cherry Tree was a co-founder along with CEO Steve Shank in the formation of Capella.

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Capella Education Company Announces Pricing of Its Initial Public Offering

MINNEAPOLIS—(BUSINESS WIRE)—Nov. 9, 2006—Capella Education Company (NASDAQ:CPLA), a provider of exclusively online post-secondary education through its wholly owned subsidiary Capella University, today announced the pricing of its initial public offering of 4,000,000 shares of common stock at a price of $20.00 per share. Capella Education Company offered 3,632,140 shares of common stock and selling shareholders offered the remaining 367,860 shares. In addition, the Company has granted the underwriters the option to purchase up to an additional 600,000 shares at the initial public offering price to cover over-allotments. The proceeds from the sale of shares by the Company, except those from the over-allotment, will be paid to existing shareholders as a special distribution. Any remaining proceeds to the Company will be used to pay fees and expenses of the offering and for general Corporate purposes. The Company will not receive any of the proceeds from the sale of shares by the selling shareholders.

The offering was made through an underwriting syndicate led by Credit Suisse Securities (USA) LLC. The other co-managing underwriters in the syndicate were Banc of America Securities LLC, Piper Jaffray & Co. and Stifel, Nicolaus & Company, Incorporated.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sales of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state. Any offer or sale will be made only by means of the written prospectus forming a part of the effective registration statement.

A copy of the final prospectus related to this offering may be obtained by contacting Credit Suisse Securities (USA) LLC, Prospectus Department, One Madison Avenue, New York, NY 10010 (Tel: 1-800-221-1037).

About Capella Education Company
Capella Education Company is an exclusively online post-secondary education services company. Through our wholly owned subsidiary, Capella University, we offer a variety of doctoral, master's and bachelor's programs in the following disciplines: business, organization and management; education; psychology; human services; and information technology. Our academic offerings combine competency-based curricula with the convenience and flexibility of an online learning format. As of September 30, 2006, we offered 766 online courses and 13 academic programs with 76 specializations to approximately 16,400 learners.

CONTACT: Capella Education Company
Media Contact:
Irene Silber, 612-977-4132
Irene.Silber@capella.edu
or
Investor Contact:
Heide Erickson, 612-977-5172
Heide.Erickson@capella.edu

SOURCE: Capella Education Company