ADvTECH adds Monash South Africa to growing higher education portfolio
(Incorporated in the Republic of South Africa)
(Registration number 1990/001119/06)
Share code: ADH
(“ADvTECH” or “the Company”)
ADvTECH ADDS MONASH SOUTH AFRICA TO GROWING HIGHER EDUCATION PORTFOLIO
In terms of section 9.15 of the Listings Requirements, shareholders are advised that ADvTECH,
through its subsidiary, The Independent Institute of Education Proprietary Limited, has agreed to the
key terms of a proposed transaction with Monash South Africa Limited (MSA) and LEI AMEA
Investments BV, which will see ADvTECH acquiring control of the MSA business (“the Business”), as
well as the related property company, Laureate SA Proprietary Limited (“the Property Company”).
Finalisation of the transaction is subject to the fulfilment of conditions relating to the proposed
Africa’s largest private education group ADvTECH, continues to consolidate its position in the tertiary
education sector with the acquisition of MSA, a leading South African private tertiary education
institution with students from more than 50 countries. The acquisition will bring ADvTECH’s tertiary
student complement to more than 40, 000 full time and 30, 000 distance students, along with a
comprehensive suite of premium programs, an extensive executive education and training portfolio,
and new highly sought-after programmes such as engineering and public health.
RATIONALE FOR THE TRANSACTION:
MSA, a joint venture between the prestigious Monash University and Laureate Education, Inc., the
world’s largest private higher education network, offers a world-class education environment, with a
strong track record for outstanding pass rates, qualification completion times and student
employability, which perfectly complements ADvTECH’s existing offering. MSA’s reputation for
academic excellence aligns with ADvTECH’s values and will support its growth strategy. The
Independent Institute of Education (The IIE), ADvTECH’s higher education division, together with its
existing brands Varsity College, Rosebank College and Vega and now MSA, positions us well to
further develop our reputation as a leading private Higher Education provider.
The MSA campus, located on Johannesburg’s West Rand, is one of the largest private higher
education precincts in the country. With a capacity for 6 500 students, it boasts extensive sports
facilities, laboratories and 4 student residences, creating a university-like environment for students
drawn from across the continent.
Prof. Alwyn Louw, CEO and Academic President of MSA, says MSA is excited about becoming part
of ADvTECH, as well as the opportunities that a new steward with local insights, views and
experiences will bring to the development of high-quality education for South Africa.
Commenting on the transaction, ADvTECH Group CEO Roy Douglas said: “We are delighted with the
addition of MSA to our existing high-quality academic offering and look forward to integrating it into
the group following the finalisation of regulatory and competition commission approval processes.
MSA’s track record of academic excellence, along with its growth prospects, aligns perfectly with the
strategic imperatives of ADvTECH.”
“Organic growth is a key measure of our business, and together with acquisitions that add value to
our existing portfolio, form an important part of our strategy,” Douglas says.
This transaction follows a number of other recent acquisitions by ADvTECH in the Tertiary Education
sector, including Capsicum Culinary Studio, The Private Hotel School and Oxbridge Academy.
EFFECTIVE DATE AND CONDITIONS PRECEDENT:
The transaction will become effective once all the conditions precedent to the offer have been met.
Conditions Precedent include the approval of the Competition Commission, approval of the
Department of Higher Education and Training (DHET) and the Council on Higher Education (CHE),
and any exchange control approvals which may be required in terms of the Exchange Control
Regulations. All things being equal, it is expected that the Effective Date will be on or about 1 January
2019. Shareholders will be advised accordingly.
TRANSACTION CONSIDERATION & OTHER TERMS:
The transaction consideration will entail an amount of R343 million, plus cash on hand and working
capital adjustments at Effective Date. In order to not fall foul of Section 9.8(d) of the Listings
Requirements regarding being deemed a Category 1 transaction, a maximum consideration of R500
million has been agreed, however, based on current estimates of likely working capital adjustments,
the final consideration is expected to be well below the maximum.
NET ASSETS & ATTRIBUTABLE PROFITS:
As at the audited last year end being 31 December 2017, the combined Net Asset Value (“NAV”) of the
Business and the Property Company was R330 million.
The consolidated pro forma results of the business being acquired reflects a profit after taxation for the year
ended December 2017 of R9,6 million. Significant synergies have already been identified and are expected
to benefit the enlarged group. This forward looking statement has not been reviewed nor reported on by the
Company’s external auditors.
Laureate South Africa, the related property company will become a subsidiary of The Independent
Institute of Education, a major subsidiary of ADvTECH. The MOI will be amended so as to conform to
Schedule 10.21 of the Listings Requirements, as required.
CATEGORISATION OF THE TRANSACTION:
For purposes of categorisation, the transaction is deemed a category 2 transaction, given the
maximum cash consideration payable, or potentially payable in terms of the agreed terms.
11 September 2018
Sponsor: Bridge Capital Advisors Proprietary Limited
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