Press release from Filing Services Canada
CIBT Sells One of its Subsidiaries for $13.5 Million
Tuesday, September 03, 2013
CIBT Sells One of its Subsidiaries for $13.5 Million09:00 EDT Tuesday, September 03, 2013
FSC / Press Release
CIBT Sells One of its Subsidiaries for $13.5 Million
Vancouver, British Columbia CANADA, September 03, 2013 /FSC/ - CIBT Education Group Inc. (MBA - TSX, MBAIF - OTCQX), ("CIBT" or "Company") is pleased to report that it has signed a definitive agreement with Loyalist Group Limited ("Loyalist") (TSXV.LOY) to sell one of CIBT's subsidiaries, King George International College & King George International Business College (collectively "KGIC"), for $13.5 million, subject to certain adjustments. The purchase price in this all cash transaction is payable in two installments, $9.5 million on closing and $4 million six months from the closing date. Closing is expected to occur shortly. Included in the purchase and sale agreement is a binding term sheet setting out the material terms of a business arrangement between Loyalist and CIBT under which CIBT will continue operating all KGIC operations in China as exclusive licensee.
On March 15th 2010, CIBT acquired KGIC for a total of $4.5 million dollars, of which $4.3 million dollars was paid on closing and $0.2 million was paid in 2012. At the time of acquisition, KGIC recorded revenue of $16.19 million for the fiscal year ending April 30, 2009 with 5,000 international students. Due to the efforts of KGIC's management team and synergies created within the CIBT group of companies, since 2010 KGIC's revenue has grown substantially to approximately $25 million for the fiscal year ending August 31st 2013 with over 8,000 international students.
"We are pleased with our return on investment from this transaction in 3.5 years" commented Toby Chu, President and CEO, Vice Chairman of CIBT Education Group Inc. "In addition to an aggregated profit of $2 million generated to CIBT since our acquisition, we will record an additional gain of $9 million from this transaction, or approximately $0.14 earnings per share."
"Going forward, CIBT will concentrate its efforts on growing our portfolio of schools in Canada and abroad under the brands of Sprott Shaw College, Ascenda School of Management and CIBT School of Business China. We will focus on the Canadian domestic market as our base, and expand our international network of student recruitment for substantial growth. Most importantly, it is our vision to add several complimentary businesses to our business model with three main objectives as priorities:
1) Acquire additional schools with long term programs such as career technical training, university level degree programs, and kindergarten to grade 12 schools
2) Expand our new division, Global Education Alliance, to recruit a large volume of international students, from kindergarten to high school and universities, to study in North America
3) Establish a portfolio of real estate projects to provide affordable accommodations for international students attending schools in North America".
Long Term Programs with special niche market:
CIBT's wholly owned subsidiary, Sprott Shaw College, is a leading, 109 year old career and technical college in Canada with substantial revenue generated from Canadian domestic and international markets. The length of Sprott Shaw's programs ranges from 1 to 4 years, therefore enjoying a lower turnover of students and reduced recruitment costs leading to higher margins. These are characteristics of the first and second business objectives outlined above. To expand on these objectives, CIBT has plans to acquire and develop a chain of elite kindergarten to grade 12 schools in Asia serving as feeders to its elite school partners in Canada and the United States. Further details will be disclosed in future news releases.
In addition to operating its education business, CIBT is developing two education super centres in North America called the Global Education City, both of which will be located in the Greater Vancouver area. The Global Education City concept is to aggregate a number of public and private educational institutions at one centralized location adjacent to a major traffic hub and along the subway / Skytrain route, and attach thereto a long stay hotel designed for international students and visiting parents. The Global Education City will be supplemented by full service packaged offices for student recruitment agents and other complementary services to international education such as travel agencies, immigration consultants and financial institutions. The Global Education City will add substantial supplemental income to the revenues generated by CIBT's schools and those of its academic partners, ranging from language schools to digital arts and fashion design schools, and universities. The objective of Global Education City is to provide international students with a one-stop solution including a variety of public and private schools at one centralized location, a variety of student services and after school activities, and a safe and secure environment to live, study and enjoy their North American experience at reduced cost. Further details about the Global Education City will be disclosed in future announcements.
About CIBT Education Group:
CIBT Education Group Inc. is an education management company focused on the global education market since 1994. Listed in Canada on the Toronto Stock Exchange and in the U.S on the OTCQX International, CIBT Group owns and operates a network of business, technical and language colleges in North America and Asia. CIBT Group offers cooperative joint programmes in 18 countries with over 50 campuses, recruitment offices and training centers enrolling over 13,000 students annually. Its subsidiaries include Sprott Shaw College (established in 1903), Acsenda School of Management, CIBT School of Business China, and King George International College. Through these subsidiaries, CIBT Group offers Western and Chinese accredited business and management degrees, programmes in college preparation, healthcare, hotel management and tourism, English language training, English teacher certification, junior and high school preparation programmes for overseas study, and other career/vocational training. CIBT Group also owns Irix Design Group, a leading design and advertising company based in Vancouver, Canada, Global Career Center ("GCC"), and Global Education Alliance ("GEA"). GCC is a job placement call center located in the Philippines dedicated to providing employment services to CIBT Group graduates for free throughout their careers. GEA is the premier solution for international students wishing to enter elite kindergarten, primary, secondary schools and universities in North America. Visit us online at www.cibt.net.
On behalf of the Board of Directors,
Vice-Chairman, President & CEO
CIBT Education Group Inc.
Phone: 1-604-871-9909 Email: firstname.lastname@example.org
Investor Relations Contact: 604.871.9909 | Email: email@example.com
Some statements in this news release contain forward-looking information (the "forward-looking statements") about CIBT Education Group Inc. ("CIBT Group") and its future plans. Forward-looking statements are statements that are not historical facts. The forward-looking statements in this news release are subject to various risks, uncertainties and other factors that could cause the company's actual results or achievements to differ materially from those expressed in or implied by forward-looking statements. With respect to the statement in this news release as to the future acquisitions and development of career technical training and K-12 schools, and real estate projects such as Global Education City for student and educational accommodations, these risks, uncertainties and other factors include, without limitation, uncertainty as to the company's ability to achieve the goals and satisfy the assumptions of management and general economic factors and other factors that may be beyond the control of the company. Forward-looking statements are based on the beliefs, opinions and expectations of the company's management at the time they are made, and CIBT Group does not assume any obligation to update its forward-looking statements if those beliefs, opinions or expectations, or other circumstances, should change.
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