NCLE acquires Riyadh-based Al-Ghad School for SAR 37 mln

National Company for Learning & Education (NCLE) signed a purchase agreement to fully acquire Riyadh-based Al-Ghad National Schools, for a value of SAR 36.7 million, it said in a bourse filing.

Al-Ghad Schools has been assessed using different valuation methods based on discounted cash flows, price to equity ratio, in addition to price to equity ratio before deducting financial charges, taxes, depreciation and amortization, the statement noted.

The agreement encompasses a number of guarantees and undertakings provided by the vendors in respect of their business, including the accuracy and correctness of the information included in the accounts and financial statements of Al-Ghad Schools and the validity of the assets.

The deal also includes other guarantees related to the schools of the company and their employees in addition to compensating NCLE for any unrecognized obligations in the company's records and differences in Zakat obligations for the period prior to agreement date.

The purchase value will be paid in two installments, the first of which is SAR 15 million due on the signing of the agreement, while the second installment of SAR 21.7 million is to be paid upon signing the amendment of company’s establishment contract in accordance with the procedures followed, the statement added.

The deal will be financed from using part of the IPO proceeds after obtaining approvals by the general assembly and other regulatory bodies, otherwise, the deal will be financed from internal resources and credit facilities.

The acquired company is active in the field of establishing and managing private schools, private scientific institutes, training and education centers and setting up private education schools (primary-middle-secondary) for boys and girls.

The sellers are Saleh Abdul Rahman Saleh Al Khudair, Faisal Mohammed Al Sheikh, Ghassan Ibrahim Mohammed Al Awaji and Salman Mansour Bin Jumaa.

Revenues of Al-Ghad National Schools Co. Ltd. for 2016, 2017 and 2018, according to the audited financial statements, amounted to SAR 28.135 million, SAR 28.168 million and SAR 26.085 million, respectively.

Net profit for 2016, 2017 and 2018 as per the audited financial statements were SAR 3.940 million, SAR 3.836 million and SAR 0.193 million, respectively.

The deal, which is of a main importance to NCLE, comes within the framework of the company's strategy to expand through acquisitions and the purchase of existing high-quality educational

complexes in all regions of the Kingdom in order to achieve growth and returns that achieve the company's strategy.

The financial impact of the transaction is expected to reflect on the company’s results during the fiscal year ended August 31, 2020 in line with what is disclosed in the financial statements for the last three year.

NCLE added that the signing of this agreement does not mean completion of the deal, as the completion of this deal requires the approval of the General Authority for Competition, noting that it will announce the completion of the transaction or any other significant developments in a timely manner.

In October, National Company for Learning & Education (NCLE) inked a non-binding memorandum of understanding (MOU) with Riyadh-based ALGhad National Schools, to acquire 100 percent of its shares, according to data available on Argaam.