SINGAPORE - MindChamps Preschool, the largest operator and franchiser of premium range preschool centres in Singapore, has inked agreements with Chinese investors ahead of a planned initial public offering (IPO) on the mainboard of the Singapore Exchange.
MindChamps, which is on an overseas expansion trail, has signed exclusive business partnerships with investment firms China First Capital Group (CFCG) and Hillhouse Capital.
The parties intend to operate preschools 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 on Wednesday (Oct 25).
Last month, Bloomberg reported citing sources that the company intends to launch an IPO here as soon as this quarter, and is seeking a valuation of about S$200 million. A spokesman for MindChamps declined to comment.
MindChamps was founded as an educational research centre in Australia in 1998 and opened it first preschool in Singapore in 2008.
It now has six company-owned and 44 franchisee-operated preschools and reading and writing enrichment centres for children between the ages of two months and 10 years old across Singapore, Australia, the Philippines and the United Arab Emirates.
In its Hong Kong Exchange filing, 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 S$11 million, it said.
In 2014, Singapore Press Holdings bought a 22 per cent stake in MindChamps for S$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 preschool education and achieved a leading position in the premium range preschool market."
In Singapore, where MindChamps has 36 preschools and three more standalone enrichment centres, education and in particular enrichment is a growing industry.
A survey by The Straits Times and research firm Nexus Link in 2015 found that four in 10 families here pack their preschool children off to tuition, which costs them about S$155 a month.
But competition for private education providers is also rising.
To deal with a shortage of preschool places for children in the ages of zero to four, as well as to raise the quality and affordability of preschools here, the Government announced in August that by 2022, annual public spending on the preschool sector will reach S$1.7 billion, more than double the S$840 million committed this year.
By 2023, preschools that are run or supported by the Government will take up two-thirds of the market share, up from half.