KUALA LUMPUR (Jan 11) : Paramount Corp Bhd is acquiring 66% stake in a K-12 education group called REAL Education Group for RM183 million cash.
The K-12 education segment consists of kindergarten, primary and secondary education.
In a statement today, Paramount said it has entered into an agreement for the acquisition from Character First Sdn Bhd, part of the former's effort to be one of the largest full-spectrum education services provider in Malaysia.
REAL Education was established in 1985. It has three key brands, namely REAL Kids, REAL Schools and the Cambridge English for Life, with a total of 18,000 students across 30 REAL Kids centres, six international and private schools in campuses, and 60 Cambridge centres.
"The primary and secondary school segment is an important component of Paramount Education — we can either choose to grow organically or we can achieve scale efficiently by investing in the right partner. REAL offers us the opportunity to do the latter; it is a strong K-12 brand that complements our existing offerings," Paramount group's chief executive officer Jeffrey Chew said at the signing of the acquisition this morning.
"With its instant access to an additional 18,000 students, the investment allows us to accelerate the growth plans for the Paramount Education division, establish a strong leadership position in the K-12 sector, and concurrently build a strong base of recurring income for Paramount group," he added.
Chew also said the acquisition provides Paramount Education with the opportunity to offer a more affordable alternative for high quality K-12 education, which in turn allows the group to reach out to a wider student universe, especially the kindergarten market.
"We also see synergies in many areas, from staffing and training, marketing and shared services, as well as opportunities for student continuity and retention, with REAL Kids kindergarten students moving to our Sri KDU national and international schools, and REAL School students moving to our KDU University Colleges," he said.
Chew said REAL is in a fee segment that complements Paramount's existing schools, while the 66% stake acquisition allows the REAL founders and current REAL leadership team to stay on as minority shareholders, to share their experience and knowledge.
The acquisition will be funded through internally-generated funds and bank borrowings. Credit Suisse is acting as the exclusive financial advisor to Paramount for the acquisition.
In a filing to Bursa yesterday, Paramount Corp requested for its shares to be suspended from trading since 9am this morning, pending a material announcement.