LONDON (Alliance News) - Georgia Capital PLC said Monday it has signed a share purchase agreement and will acquire a 70% equity interest in British-Georgian Academy LLC.
The deal puts the Georgian private school's enterprise value at 6.4 times enterprise value to earnings before interest, taxation depreciation and amortisation in 2020. Further pricing details have not been disclosed.
British-Georgian Academy has around 750 students from preschool to grade 12 and provides Georgian and Cambridge International Education programmes. Its capacity is fully utilised and only around half of first grade applicants are accepted.
Investment firm Georgia Capital intends to expand the existing campus and add an additional campus in Tbilisi to raise capacity to 3,350 students by 2021.
The company expects to need GEL88 million of capital for the expansion, about GBP25 million. Of this, around GEL66 million will be equity capital from shareholders and the remainder will be debt financed.
Georgia Capital is predicting that the private school market in Georgia will double in the next five years and intends to create a portfolio of these schools in different market segments. British-Georgian Academy will be a premium school, and premium schools are expected to make up around a third of revenue for the company by 2025, it said.
"I am very pleased to announce our first investment in the attractive private education business. [British-Georgian Academy] is a well-established business with a strong management team, strong dollar-linked cash flow generation and 40% Ebitda margin...Looking ahead, we are both confident and excited at the opportunities this partnership will bring to Georgia Capital," said Chair & Chief Executive Irakli Gilauri.
Shares in Georgia Capital were down 0.3% at 964.00 pence on Monday morning.
Georgia Capital (CGEO)