MindChamps PreSchool has inked agreements with Chinese investors ahead of a planned initial public offering (IPO) on the mainboard of the Singapore Exchange.
MindChamps, the largest operator and franchiser of premium-range pre-school centres in Singapore, has signed exclusive business partnerships with investment firms China First Capital Group (CFCG) and Hillhouse Capital.
The parties intend to operate pre-schools and kindergartens under the MindChamps brand in China, including Hong Kong, as well as in Australia and the United States.
More definitive terms will be entered into within six months from the IPO date, said CFCG in a bourse filing yesterday.
Last month, Bloomberg cited sources saying that the company intends to launch an IPO here as soon as this quarter, and is seeking a valuation of about $200 million. A spokesman for MindChamps declined to comment.
MindChamps was founded as an educational research centre in Australia in 1998 and opened its first pre-school in Singapore in 2008.
It now has six company-owned and 44 franchisee-operated pre-schools and reading and writing enrichment centres for children between the ages of two months and 10 years, across Singapore, Australia, the Philippines and the United Arab Emirates.
In its Hong Kong Exchange filing yesterday, CFCG said it has also entered into a cornerstone subscription agreement with MindChamps. It will subscribe for a 4.99 per cent stake in MindChamps, a financial commitment that is not expected to exceed $11 million, it said.
IN A GOOD POSITION TO GROW
Globally, the early childhood education sector has gained much visibility in recent years. MindChamps PreSchool is well positioned to ride on the growth in the early childhood education industry and has built a prominent brand for pre-school education and achieved a leading position in the premium-range pre-school market.
CHINA FIRST CAPITAL GROUP
In 2014, Singapore Press Holdings bought a 22 per cent stake in MindChamps for $12 million.
CFCG, which sells automotive parts but began diversifying into the education business last year, said: "Globally, the early childhood education sector has gained much visibility in recent years. MindChamps PreSchool is well positioned to ride on the growth in the early childhood education industry and has built a prominent brand for pre-school education and achieved a leading position in the premium-range pre-school market."
In Singapore, where MindChamps has 36 pre-schools and three stand-alone enrichment centres, education and, in particular, enrichment is a growing industry.
A 2015 survey by The Straits Times and research firm Nexus Link found that four in 10 families here pack their pre-school children off to tuition, which costs them about $155 a month.
But competition for private education providers is also rising.
To deal with a shortage of pre-school places for children in the ages of zero to four, as well as to raise the quality and affordability of pre-schools here, the Government announced in August that by 2022, annual public spending on the pre-school sector will reach $1.7 billion, more than double the $840 million committed this year.
By 2023, pre-schools that are run or supported by the Government will take up two-thirds of the market share, up from half.