Business
Afya Limited Announces Closing of the Acquisition of UNIGRANRIO
NOVA LIMA, MINAS GERAIS, Brazil--(BUSINESS WIRE)-- Afya Limited, or Afya (Nasdaq: AFYA) in addition to the Press Release released by the Company on May 27,
About this update from Afya Limited
[{"type":"text","content":" NOVA LIMA, MINAS GERAIS, Brazil--(BUSINESS WIRE)--\nAfya Limited, or Afya (Nasdaq: AFYA) in addition to the Press Release released by the Company on May 27, 2021, today announced the closing of its acquisition, through its wholly-owned subsidiary Afya Participações S.A., of 100% of the total share capital of Companhia Nilza Cordeiro Herdy de Eduação e Cultura (“UNIGRANRIO”).\n\nThe aggregate purchase price (enterprise value) was R$700.0 million, including the assumption of estimated Net Debt of R$73.9 million. The equity value was paid 60% in cash on the date hereof and 40% will be paid in four equal annual installments, adjusted by the CDI rate. We expected an EV/EBITDA of 4.1x at maturity and post synergies.\n\nUNIGRANRIO is a post-secondary education institution with government authorization to offer on-campus, undergraduate medical, and health-related courses in the state of Rio de Janeiro and has the best academic quality among for profit universities in the state.\n\nThe acquisition contributed 308 medical school seats to Afya, increasing Afya’s total medical school seats to 2,611. This translates to 18,799 medical students at maturity, representing a 9% CAGR from 2020 to 2026. UNIGRANRIO distance learning also has a high quality operation, scoring a CI of 5 (maximum quality evaluation) and its expertise will help to improve margins of Afya’s ex-Health undergraduate courses.\n\nThe reported Net Revenue for 2020 was R$ 263.1 million of which 49% comes from medical courses and 68% from all health-related courses (including medicine). The 2023 projected Net Revenue for UNIGRANRIO is R$ 343.2 million at full maturity, with medical courses representing 71% of this amount and 85% considering all health-related courses.\n\nThere are 82 additional seats still pending approval. If approved by the Ministry of Education, will result in a potential additional payment structured as follow (I) if the approval is granted in the first year after the acquisition, R$ 1.1 million per seat (II) if the approval is granted in the second year after the acquisition, R$ 1.0 million per seat. (III) if the approval is granted between the third and fourth year after the acquisition, R$ 0.9 million per seat.\n\nAbout Afya: \n\nAfya is a leading medical education group in Brazil based on number of medical school seats, delivering an end-to-end physici...