WELLINGTON, NZ: Evolve Education Group’s wholly owned subsidiary Lollipops Educare Holdings Limited will sell 100% of the shares in Lollipops Educare Centres Limited (LECL) to Anchorage Capital Partners’ Shine BidCo for an enterprise value of NZ$46 million.
LECL is the operator of Evolve’s New Zealand based centres and, at completion of the Transaction, will operate 105 centres.
The enterprise value of $46m represents a multiple of over 13x FY21 New Zealand underlying EBITDA. This compares with Evolve’s current trading multiple of 9x FY21 EBITDA.
Completion of the transaction is currently targeted for the end of September 2022 subject to certain conditions.
The rationale for the Transaction is largely to accelerate the execution of Evolve’s Australian growth strategy by redeploying proceeds to acquire assets in Australia.
Over the past two and a half years, New Zealand performance has been directly impacted by Government-mandated closures in response to the COVID-19 pandemic and closed borders have led to teacher shortages, lower immigration levels and a detrimental impact on overall centre occupancy.
While the board believes occupancy will recover in New Zealand once COVID-19 impacts are reduced, the timing and extent of this is inherently uncertain and largely conditional on factors outside the control of the company.