Divested US Early Childhood Education
- Knowledge Universe (KUH), the education-linked investment of k1 Ventures (KONE SP), has divested its early childhood education in the U.S. to Swiss-based investment firm Partners Group at a reported enterprise value of US$1.5bn.
- The sale involves KUE’s key brands such as KinderCare Learning Centers, which operates 1,400 centers in 38 U.S. states, as well as Children's Creative Learning Centers and Champions.
- The deal is expected to close later this year, and represents a substantial progress in the monetisation of KUH’s diversified investment holdings.
- Earlier this year, KUH had divested its Asia-based pre-school education business, which included the Canadian International School at Jurong Lakeside and Pat Schoolhouse.
- And last year, the group divested its UK education business, Busy Bees, for £240m representing a 50% profit.
- KUH is currently sitting on substantial cash that we believe will eventually be distributed to its shareholders, including k1, which owns a 9.7% in KUH.
- KUH’s remaining investment is its real estate of some 800 owned-education centers, which we believe will eventually be divested in due course.
- We expect a steady stream of dividends from these asset sales.
- k1 is currently on the divestment mode and have distributed SGD194m, or S$0.09/share in the past year.
- We value the stock on 10% discount to its sum-of-parts valuation, and have a TP of SGD0.23.
- Maintain BUY.
(Goh Han Peng)
Source: http://www.rhbgroup.com/
