AEC Education plc

Company summary

AEC Education plc, is an AIM listed company which provides English language training, professional education, higher education, workplace training and examination and certification services from locations in the UK, Singapore, Malaysia and elsewhere in the Far East.

04 October 2012 | Education

Company news

AEC Education Sells Educational Resources To Pearson for £2.5 Million

AEC Education plc, a higher eductation, vocational training and English language business, has agreed to sell its non-core examinations subsidiary, Educational Resources Pte Ltd, or ER, to Pearson Education South Asia Pte. Ltd. for £2.5 million in cash.

The deal also includes a deferred payment equal to the cash realised by Pearson from selling 3m shares it holds in AEC. At the current market bid price this would net AEC a further £270k.   

For the year ended Dec. 31, 2011, ER contributed revenue of S$3.92 million Singapore dollars (approx. £2m) representing 10.5% of overall  Company revenue; EBITDA of  S$205,651 (£0.10 million) and total assets as at Dec. 31, 2011 of S$6.54 million (£3.3 million). The Company said the sale proceeds will be used to expand its core businesses.

The shares were up by more than 14% on the news, valuing the Company at approximately £3.8 million.

Comment:

This deal is weclome news for shareholders, coming just days after disappointing interim results which showed the Company moving into the red on the back of larger than expected losses at its troubled Malvern House English Language business based in the UK. The £2.5m cash proceeds will add to its existing cash resources which were £2.9m at the end of June 2012. The deal allows the Company to focus on explanding its profitable higher education business in Singapore and Malaysia and sorting out its problems at Malvern House. The deal leaves AEC Education trading at a discount to its net cash which seems to make little sense.

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Deal origination - acquisitions - We help quoted companies and private equity houses source acquisitions in the UK and overseas.

Deal origination - disposals - We help owners of companies wishing to dispose of their business.

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