G8 Education will acquire Sterling Early Education for $228 million, boosting its market share of childcare and early education in Australia to 28.5 per cent, increasing the number of its facilities to 388.
Varsity Lakes Queensland-based G8 is paying 5.79 times 2015 forecast earnings of $39.4m before interest and tax for Sterling’s 91 childcare and education centres, according to a G8 ASX statement.
G8 says it will pay for the purchase with $215m from its cash reserves and issue 3 million G8 shares on March 31 to help fund the purchase. G8 shares, which are in a trading halt, have climbed 51 per cent this year. The stock closed at $4.76 on Friday.
Chris Scott, G8’s managing director, did not return calls seeking comment. No investment bank or law firm were named as advisors on the transaction in the ASX statement.
G8 will pay for the purchase of Sterling before September 30 providing contractual conditions are satisfied.
(Reporting by Brett.Cole@businessspectator.com.au)
(Editing by Miranda.Maxwell@businessspectator.com.au )