CALGARY, Aug. 17, 2015 /CNW/ - BrightPath Early Learning Inc. ("BrightPath" or the "Company") (TSX-V: BPE), the leading Canadian provider of quality early childhood education and care, is pleased to announce that it has closed the sale of its McKenzie Towne location in southeast Calgary to an affiliate of First Capital Realty Inc.
The building, designed and built by BrightPath, was sold for gross proceeds of $7.5 million in conjunction with a surrender of the ground lease on which the building is sited. The Company has maintained its long-term presence in the McKenzie Towne community by entering into a long-term lease for this same property. The transaction was effected at very attractive pricing for a real estate land lease transaction of this nature. With a capitalization rate of 6.76%, the pricing validates the strength of BrightPath's operating and financial covenant as a tenant.
The Company expects to report a gain on disposition of approximately $1.8 million pursuant to the sale. Furthermore, this transaction has created, after all transaction expenses, approximately $7.3 million of incremental capital comprised of net cash proceeds of $3.25 million and $4 million of bank financing available to be redeployed after repayment. This capital will be used to generate incremental cash flow and surface shareholder value from new initiatives. Such initiatives include the expansion of the Company's growth pipeline and the purchase of BrightPath's common shares which management and the board of directors believe are significantly undervalued at the current market price.
"The attractive pricing, gain on disposition and significant capital surfaced from this transaction, along with the ongoing impressive operating performance of the McKenzie Towne centre, provide validation of the unrecognized value of both the Company's owned real estate portfolio and the cash flow growth inherent in our pipeline of new development projects. This is a significant transaction that reflects BrightPath's commitment to pursuing initiatives to surface shareholder value." said Mary Ann Curran, Chief Executive Officer of BrightPath.
About BrightPath Early Learning Inc.
BrightPath Early Learning Inc. is a Canadian leader in child care and early education with 52 locations in major markets across the country. Meeting the highest standards in curriculum, nutrition, technology and recreational programing, BrightPath is committed to providing families with the very best child development programs and care Canada has to offer.
For more information, please visit www.BrightPathKids.com/corporate or contact Dale Kearns, President and CFO of BrightPath Early Learning Inc. at (403) 705-0362 Ext. 406.
Certain statements contained herein constitute forward-looking statements regarding the future growth, results of operations, performance and opportunities of the Company. Forward-looking statements can generally be identified by the use of, but not limited to, the following words: "plans", "expects" or "does not expect", "budget", "scheduled", "estimate", "forecast", "pro forma", "anticipate" or "does not anticipate", "believe", "intend", "inferred", "potential" and similar expressions or statements that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements are not historical facts, but reflect the Company's current expectations regarding future results or events based on information currently available and what the Company believes to be reasonable assumptions. All forward-looking statements are qualified by these cautionary statements.
Forward-looking statements are subject to a number of risks, assumptions and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results or events to differ materially from those expressed, implied or projected include, but are not limited to, general economic conditions, the Company's ability to meet and maintain forecasted occupancy levels, general government policies, continued availability of government child care subsidies to parents, unexpected costs or liabilities related to acquisitions, construction, environmental matters, legal matters, changes in interest rates, credit spreads and the availability of financing. In addition, please refer to the Risks and Uncertainties section of the Company's annual Management's Discussion and Analysis. As such, the Company gives no assurance that actual results will be consistent with these forward-looking statements.
Readers should not place undue reliance on any such forward-looking statements. These forward-looking statements are made as of the date hereof. The Company undertakes no obligation to publicly update or revise any such statement, reflect new information or reflect the occurrence of future events or circumstances, except as required by securities laws.
SOURCE BrightPath Early Learning Inc.
For further information: Dale Kearns, President & CFO, BrightPath Early Learning Inc., Office: (403) 705-0362 Ext. 406, Toll Free: (888) 808-2252, Suite 200, 30 Glendeer Circle SE, Calgary, AB T2H 2Z7, http://www.brightpathkids.com