BrightPath provides update on Peekaboo acquisition and announces new central Toronto school acquisition
Jul 26, 2016, 16:00 ET
TORONTO, July 26, 2016 /CNW/ - BrightPath Early Learning Inc. ("BrightPath" or the "Company") (TSX-V: BPE), the leading Canadian provider of quality early childhood education and care, today provided an update on its previously announced agreement to acquire the Peekaboo Child Care Centre Inc. ("Peekaboo") portfolio of 20 early learning and child care centres in the Greater Toronto Area. Additionally, the Company reported that is has completed the acquisition of The Lawrence Park School in Toronto. The long-standing and successful school, located in the established central Toronto neighbourhood of Lawrence Park, was established in 1982, currently has 95 licensed spaces and further augments BrightPath's accretive growth in the Greater Toronto Area.
Under the terms of the Peekaboo definitive agreement, BrightPath will acquire approximately 2,500 licensed spaces in 20 early learning and child care centres located in the Regions of Peel and Halton. The addition of this capacity will increase the size of BrightPath's portfolio by 41%.
The Company continues to work towards completion of the transaction with initial conditions under the agreement satisfied and meetings with regional child care authorities underway. The closing date is expected to be in the third quarter of 2016 and remains subject to customary closing conditions and those regarding child care licensing.
As previously announced, the purchase price for the Peekaboo portfolio is $22 million based, in part, on historical financial performance of the centres. Using historical metrics, the acquisition generates approximately $3 million of incremental Funds from Operations ("FFO") net of the financing costs on the bank facility arranged to fund the transaction. The Company anticipates further operational and financial benefits derived through synergies and economies of scale as the Peekaboo centres are integrated with BrightPath's operating and management systems platform.
The Lawrence Park School is known for its advanced programs, lower student-to-teacher ratios and the long-tenure and professionalism of its teachers. The school educates and cares for children 18 months to six years of age.
"We are pleased to expand our high quality portfolio with this strategic acquisition in Ontario," said Mary Ann Curran, Chief Executive Officer of BrightPath. "Lawrence Park School provides BrightPath the opportunity to provide an enhanced preschool and kindergarten offering. The model supports high academic achievement and well-rounded social and emotional development, and is highly desirable in markets across Canada. We welcome the educators, other staff, children and families of the Lawrence Park School to BrightPath."
The transaction, valued at $1.125 million, closed in July 2016 and was financed using the Company's available capital resources. Accordingly, the transaction is expected to be immediately accretive.
NON- IFRS PERFORMANCE MEASURES
The Company uses FFO as an indicator of financial performance. FFO is calculated by adjusting net profit (loss) to add back acquisition costs expensed as incurred, depreciation and certain other non-cash items.
FFO does not have a standardized meaning prescribed by IFRS. The Company's method of calculating FFO may be different from other entities and, accordingly, may not be comparable to such other entities. FFO: (i) does not represent cash flow from operating activities as defined by IFRS; (ii) is not indicative of cash available to fund all liquidity requirements, including capital for growth; and (iii) is not to be considered as an alternative to IFRS-based net profit (loss) for the purpose of evaluating operating performance.
ABOUT BRIGHTPATH EARLY LEARNING INC.
BrightPath Early Learning Inc. is a Canadian leader in child care and early education with 55 locations in major markets across the country and comprising 6,029 licensed spaces. With the closing of the Peekaboo acquisition and the Lawrence Park School, the breadth of the Company's portfolio will expand to 76 locations totaling approximately 8,595 licensed spaces. Meeting the highest standards in curriculum, nutrition, technology and recreational programing, BrightPath is committed to providing families with the very best child development and care Canada has to offer.
For more information, visit www.BrightPathKids.com/corporate (TSX‐V: BPE).
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.
Readers should also note that the Peekaboo acquisition remains subject to certain conditions to be waived by BrightPath and there is no assurance that the transaction will be completed.
SOURCE BrightPath Early Learning Inc.
For further information: regarding this release, please contact Dale Kearns, President & Chief Financial Officer of BrightPath Early Learning Inc. at (403) 705-0362 ext. 406.
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