Edu Holdings Limited · ASX:EDU
Edu — Merger or Acquisition (May 2018)
25 slides from Edu's merger presentation, May 29, 2018
Slide 1: IKON Institute Acquisition and Non-Renounceable Rights Issue
ASX: UCW IKON INSTITUTE ACQUISITION NON-RENOUNCEABLE RIGHTS ISSUE 29 MAY 2018
Slide 2: Disclaimer
DISCLAIMER Statements in this presentation are made only as of the date of this presentation (unless otherwise stated) and the information in this presentation remains subject to change without notice. This presentation does not purport to contain all of the information which recipients may require
Slide 3: Contents
CONTENTS Executive summary 04 Transaction overview 07 HE sector 08 IKON 10 Capital raising 15 Indicative timetable 16 Key risks 17 Appendices 19 3
Slide 4: Executive Summary
EXECUTIVE SUMMARY n UCW has entered into an option agreement to acquire IKON Institute of Australia (IKON) n IKON is an accredited education provider operating in both the Vocational Education and Training (VET) and Higher Education (HE) sectors n Acquisition in line with UCW’s strategic growth plan
Slide 5: UCW Strategy
…ON STRATEGY ORGANIC GROWTH ACCRETIVE ACQUISITIONS Geographic expansion Scale Program development Sector expansion Leverage agent network Breadth of offering Offshore recruitment STUDENT LIFECYCLE A A r VOCATIONAL HIGHER EDUCATION PROFESSIONAL c to Se Certificate I - IV Associate Degree Work-ready p
Slide 6: UCW Strategy
…ON STRATEGY n Acquistion extends UCW’s reach into the HE sector, including Bachelor Degree level courses, and broadens VET offering n Aligned to ALG/4Life fields of study - Health and Community Services n Opportunity to articulate UCW’s c. 1,500 existing VET students into HE programs n Platform for
Slide 7: Transaction Overview
TRANSACTION OVERVIEW IKON SUMMARY ACQUISITION DETAILS n >10 year operating history n Purchase price of $5.5m upfront plus a deferred amount equal to (8 x FY19 EBITDA less the n Dual-sector provider - VET and HE upfront amount), payable in September 2019. The n Health and Community Services fields of
Slide 8: HE Sector
HE SECTOR HE STUDENTS 1,600,000 n 1.5m students studying higher education in 2016 1,400,000 n Largest component of the international student market 1,200,000 (c. 68% by revenue) n Total sector revenue of $35b in 2016 1,000,000 800,000 – International student revenue $6.1b, up 12% on PCP 600,000 – Do
Slide 9: HE Regulation
HE REGULATION ACTS AND STANDARDS n Highly regulated sector with a framework consisting of various legislative Acts and Standards Higher Education Standards Framework 2015 n National regulator - Tertiary Education Quality and TEQSA Act Standards Agency (TEQSA) - established under the TEQSA Act ESOS A
Slide 10: About IKON
ABOUT IKON n Established in Adelaide in 2005 n Dual sector provider - VET and HE n 7-year VET registration from 6 May 2018 n 7-year HE registration from 27 April 2016 n VET Student Loans and FEE-HELP provider n 6 accredited HE qualifications and broad VET scope - all within Health and Community Serv
Slide 11: IKON HE Offering
IKON HE OFFERING INTEGRATIVE PSYCHOTHERAPY ARTS PSYCHOTHERAPY Associate Degree A A A A Diploma of Integrative Bachelor of Integrative Diploma of Arts Associate Degree of Bachelor of Arts of Integrative Psychotherapy Psychotherapy Psychotherapy Arts Psychotherapy Psychotherapy Psychotherapy Yr 1: 8 u
Slide 12: IKON VET Offering
IKON VET OFFERING DOMESTIC SCOPE OF REGISTRATION n Current VET Student Loans cap of c. $500k Counselling n 3 course offerings – 2 of which are dual diplomas: Community Services – Dual Diploma of Youth Work & Youth Justice Mental Health – Dual Diploma of Alcohol & Other Drugs and Mental Health Youth
Slide 13: IKON Financials
IKON FINANCIALS n FY18e revenue of c. $6m, expected to grow to c. $7.5m in FY19 n At $7.5m revenue, anticipated FY19 EBITDA of c. $1m n FY18 is a transition year from VET to HE – VET FEE-HELP revenue ceased 31 Dec-17 (IKON has retained approval for VSL) – IKON is investing in its HE offering ahead o
Slide 14: Integration Opportunities
INTEGRATION OPPORTUNITIES n Leverage ALG’s international student agent network to recruit students for IKON’s VET and HE offering n Develop HE programs relevant to ALG’s c. 1,500 VET students to extend their period of study with the UCW corporate group and maximise the life time value of each studen
Slide 15: Capital Raising Details
CAPITAL RAISING DETAILS NON-RENOUNCEABLE RIGHTS ISSUE CAPITAL STRUCTURE POST TRANSACTION n $4m fully underwritten non-renounceable rights issue Number % of 1 new share for every 3.18618332 existing shares Ordinary shares pre-capital raising and acquisition 79,654,583 72.3% n Rights issue price of $0
Slide 16: Indicative Timetable
INDICATIVE TIMETABLE Event Indicative date Announcement of Rights Issue, lodgement of Appendix 3B and cleansing notice 29 May 2018 Despatch of notice to security holders 30 May 2018 “Ex” Date (date from which the Company’s existing shares commence trading without an entitlement to participate in the
Slide 17: Key Risks
KEY RISKS Risk factor Explanation Completion of the acquisition is conditional on satisfaction or waiver of various conditions precedent. There is no guarantee that completion Completion risk will occur The acquisition may trigger regulatory action which could result in conditions being placed on IK
Slide 18: Contact Details
CONTACT DETAILS Adam Davis Lyndon Catzel Chief Executive Officer Chief Financial Officer E: adam@ucw.com.au E: lyndon@ucw.com.au P: +61 2 9112 4541 P: +61 2 9112 4540 M: 0408 400 888 M: 0414 907 384 18
Slide 19: Appendices
APPENDICES
Slide 20: About UCW
ABOUT UCW n Private education provider, with a l Large and growing sector - $28.0b in FY17, up 16.1% on PCP focus on the international student (source: ABS) market l Positive enrolment trends – 32.4% 3-year CAGR in UCW’s international n Vision to be multi-sector provider – student enrolments Vocatio
Slide 21: Our Businesses
OUR BUSINESSES ACQUISITION TIMELINE Mar-16 Jan-17 Jul-17 l International student provider in fields l Acquired as an add-on to ALG – l 24.6% strategic stake of Fitness, Remedial Massage, Sport integration now complete l New name and brand to reflect and Recreation Management and l Performance since
Slide 22: International Student Enrolments
INTERNATIONAL STUDENT ENROLMENTS International Internationalstudent enrolments student by term enrolments by term 1,400 l Strategy to broaden course offering and national 1,200 expansion delivering growth l 4Life courses offered in 1,000 Sydney only - national rollout represents significant market 8
Slide 23: Course Mix
COURSE MIX International student enrolments by field of study 3.3% 9.9% 9.8% 9.8%14.9% 14.9% 5.9% 5.9% Community Services* Community Community Services Services 19.5% Fitness 24.5% 24.5% Fitness Fitness 1H17 Remedial Massage 1H181H18 Remedial Remedial Massage Massage Sport and Recreation Sport andSp
Slide 24: Student Diversity
STUDENT DIVERSITY International student enrolments by source country (Top 20)1 l International students from 73 source countries l Top 20 source countries Czech Republic, 5% Philippines, 4% Spain, 4% represent 82.6% of Colombia, 7% current enrolments - Czech Republic, 5% Philippines, 4% Spain, 4% ma
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