LONDON: Georgia Capital PLC has signed a share purchase agreement to acquire an 80% equity interest in Green School LLC.
The transaction values Green School at 5.8x EV/EBITDA 2020 based on initial consideration payable by Georgia Capital upon transaction completion. An additional earn-out may apply if the existing school campus annual earnings reach GEL 2 million EBITDA within the next three academic years.
The acquisition of Green School is in line with Georgia Capital’s strategy to secure the leading private school education platform for its affordable segment.
Green School is a well-managed and affordable school with strong brand equity and a great location near a densely populated area of Tbilisi. The School was established in 2011 following the privatization of a public school and is regarded as one of the best value-for-money schools in the country.
Following the acquisition, Green School will also expand and operate three new schools with total targeted capacity of 4,000 learners by 2024. The Group expects that GEL 33.4 million capital expenditure will be required to finance the expansion projects, of which, approximately GEL 16.7 million will be equity capital contributed by shareholders on a pro-rata basis (Georgia Capital’s share will be GEL 14.9 million) and the rest will be debt-financed.
Irakli Gilauri, Georgia Capital Chairman and CEO commented: “I am delighted to announce Georgia Capital’s third partnership agreement in the education sector with one of the leading schools in the country. With this partnership, we are entering the affordable segment of private school education, where we see attractive opportunities for a scaled player. Green School provides high quality, affordable education through well-regarded teaching practices and great school facilities. It is our pleasure to work with management team and to make Green School’s top-class educational services accessible on a larger scale.
With this partnership agreement, we now have three high quality school partnerships across premium, mid-level and affordable education segments that, when combined, already provide a clear pathway to approximately 11,750 learners, more than one-third of our targeted 30,000 learners by 2025.”
Bakur Sulakauri, Green School shareholder commented: “By combining our experience in the field of private education and Georgia Capital’s expertise in successfully deploying capital, we expect to substantially scale-up our affordable and high quality K-12 education in Georgia. We are excited to partner with Georgia Capital and start delivering on our mutual goals and to make Green School’s teaching methodologies, values and facilities widely represented and more accessible to the market.”