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Laureate Education To Sell Brazilian Operations to Ser Educacional in a Deal Valued @$724M

Laureate Education, Inc. (NASDAQ: LAUR) announced today that it has entered into a definitive agreement with Ser Educacional S.A. (B3: SEER3) for the sale of its Brazilian operations.

· 09/13/2020 20:35
Laureate Education, Inc. (NASDAQ:LAUR) announced today that it has entered into a definitive agreement with Ser Educacional S.A. (B3: SEER3) for the sale of its Brazilian operations. The transaction follows Laureate's announcements on Friday, September 11th regarding agreements to divest Walden University and its Chilean operations. All three divestitures are the result of Laureate's previously announced efforts to explore strategic alternatives for each of its businesses to unlock shareholder value.  Agreement Signed to Sell Brazilian Operations Laureate operates 11 higher education institutions in Brazil. These institutions collectively enroll more than 267,000 students in technical, undergraduate and postgraduate programs. Ser Educacional is a respected network of educational institutions in Brazil, united by a commitment to the personal and professional growth of all of its students. Commenting on the transaction, President and Chief Executive Officer of Laureate, Eilif Serck-Hanssen, said, "This transaction resulted from our exploration of strategic alternatives for each of Laureate's businesses. We are incredibly proud of our Brazilian institutions and their enduring impact on the lives of their students. They demonstrate the best of Laureate's commitment to deliver quality at scale, and we believe each of these institutions is well placed to continue to expand on Laureate's legacy in Brazil." The transaction value is approximately R$3.862billion (US$724 million at the current exchange rate and share value), including the assumption of indebtedness, net of cash (which, as of June 30, 2020, was US$124.9 million). In the transaction, Laureate will receive R$1.70 billion in cash and 101,138,369 shares of Ser Educacional. Upon the closing of the transaction, Laureate will own approximately 44% of the shares of Ser Educacional, which will be subject to certain voting restrictions. In connection with the transaction, Ser Educacional will seek to list American Depositary Shares (ADS) on a U.S. securities exchange.  The transaction is subject to certain closing conditions, including regulatory approval and the completion of the ADS listing. Additionally, the agreement includes a 30-day "go-shop" period that ends at 12:01 A.M. (New York time) on October 13, 2020. During this period, Laureate and its advisors may solicit, encourage and enter into negotiations that may yield alternative acquisition proposals. There is no guarantee that this process will result in a superior proposal. Ser Educacional has a right under the agreement to match a superior proposal and to receive a termination fee if Laureate terminates the agreement to accept a superior proposal. Laureate does not intend to disclose developments with respect to the "go-shop" process unless and until Laureate determines such disclosure is appropriate. The transaction is targeted to close toward the end of 2021. Goldman Sachs & Co. LLC is acting as the exclusive financial advisor to Laureate, and Veirano Advogados, Demarest Advogados, Simpson Thacher & Bartlett LLP and Jones Day are acting as legal advisors. Momentum in Laureate's Strategic Review Process Since announcing its decision to undertake a strategic review of its business portfolio in January 2020, Laureate has entered into agreements to divest operations in five geographies: Australia, New Zealand, Chile, Brazil, and the U.S. Mr. Serck-Hanssen said, "Each of these transactions was undertaken with careful consideration, taking into account a variety of commercial, geo-political, regulatory, and market factors. We are pleased to be moving ahead with this important value creation initiative and remain committed to continuing on this path."