Intueri to buy NZ Institute of Sport for $19.3m
Intueri Education Group [NZX: IQE], New Zealand's largest private training college, has agreed to buy the New Zealand Institute of Sport for $19.3 million to give it significant scale in the sports and complementary health sectors.
The purchase equates to 5.5 times expected 2016 earnings before interest, tax, depreciation and amortisation, Auckland-based Intueri said in a statement. The company will pay an initial $17.6 million, funded from Intueri's current debt facilities, with a potential interim payment in March 2016 and a final payment in March 2017, it said.
NZIS has almost 1,000 students enrolling each year and includes The New Zealand College of Massage, one of only two providers to offer a Bachelor's Degree level massage therapy programme. The acquisition will boost the number of Intueri students to more than 13,000 and increase its colleges across Australasia to 11.
"Broadening the range and quality of our course provision forms the basis of our growth strategy," said Intueri chief executive Rob Facer. "The ability to offer sports-based programmes will offer significant opportunities to further increase our international student numbers."
The company didn't detail the implications of the purchase on its future debt or earnings. In May, it said 2015 Ebitda would be at the lower end of its $30 million to $33 million guidance range and said its net debt had risen to $35 million following acquisitions and its 2014 dividend payment.
NZIS founder and chief executive John Fiso will remain in his current role and will likely take on additional executive leadership responsibilities with Intueri during 2016, the company said, adding all key senior staff are expected to stay on in their current roles.
The purchase is subject to regulatory and other approvals, which are expected to be received by October, the company said.
Shares in Intueri last traded at $1.59 and have shed 39 percent so far this year.