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UMeWorld aims to be top of the class with Proud Kids deal
Posted on Tuesday, 14 January 2020 12:51
UMeWorld is buying China-based online English language training company Proud Kids in an all-stock transaction.
The acquisition is due to close in April 2020, pending shareholder approval and the completion of the target’s audited financial statements.
Under the terms of the deal, Proud Kids stockholders will receive up to 25.0 per cent of UMeWorld’s common shares on a diluted basis.
Launched in 2018, the target provides English language training programmes for children aged between four and 12 based in lower-tiered Chinese cities.
Proud Kids operates within the National English Curriculum and combines local English and native English-speaking teachers who work with students in a 1-on-4 setting.
Within this model, the group has delivered over 150,000 paid lessons and its foreign teachers manage their classes and pupils through 120 classes annually.
For the financial year ended 31st December 2019, Proud Kids is expected to generate revenue of CNY 7.15 million (USD 1.03 million), a 202.97 per cent increase from CNY 2.36 million in the preceding 12 months.
Michael Lee, chief executive of the purchaser, said: “Through this initiative, UMeWorld will enter the large and rapidly expanding English language training market for kids in China with a unique and proven product.
“This expansion into the English language training market is consistent with the company’s growth strategy of embracing and expanding cross-selling and up-selling opportunities.”
Hong Kong-headquartered UMeWorld operates an online video platform focused on bringing foreign video content to China.
Its flagship UMFun product is a cloud-based assessment and learnings tool which can analyse and adapt to a student’s performance and personalises educational items to meet their individual needs.
There were 32 deals targeting language school providers announced worldwide in 2019, according to Zephyr, the M&A database published by Bureau van Dijk.
In the most valuable of these, Kinea Investimentos agreed to buy a 20.0 per cent stake in Brazil-based Central de Producoes GWUP for BRL 200.00 million (USD 48.57 million).
© Zephus Ltd