Shares of Megastudy Education and its subsidiary Megastudy surged on Wednesday following news that South Korea’s leading private equity firm is in talks to buy a large stake in the leading provider of exam preparation courses. testing and after-school tutoring services in the country, estimated at 650 billion won ($495 million). .
Megastudy Education said in a regulatory filing on Tuesday that it was in negotiations with MBK Partners to discuss various options, including a sale of management rights to PEF. According to sources, MBK Partners is considering an option to acquire a roughly 35% stake in Megastudy Education from the owners of Korea’s leading cram school.
The majority stake up for sale breaks down to 27% owned by Megastudy Chairman Son Ju-eun and his brother and CEO of Megastudy Education Son Seong-eun and 6% owned by Megastudy.
It is the family owners’ third attempt to sell their management rights, following failed deals in 2014 and 2020 due to price differences and other conditions.
Market sources estimate that the transaction is valued at around 650 billion won, which is roughly equivalent to 150,000 won per share, twice as much as Megastudy Education’s current stock price.
Shares of Kosdaq-listed Megastudy Education rose 2.48% to 86,900 won in Seoul as of 10:52 a.m., and shares of Megastudy rose 1.77% to 11,500 won.
Megastudy Education has become one of the leading tutoring service providers in Korea by expanding its business scope to all age groups with online and offline platforms such as Megastudy for college entrance exams. university, elihigh for elementary students, Mbest for middle school students and educational services. for adults. Thanks to this diversification strategy, the company continued to grow its sales despite a decrease in the school population.
The demand for online education platforms has also been strong since the onset of Covid-19.
Education is one of the M&A sectors of interest for MBK Partners, which has completed many landmark transactions in the past. He joined a bid to buy language-learning company Wall Street English (WSE) from Pearson in 2017 and acquired China’s Wendu Education Technology Group in 2019.
By Cho Yoon-hee and Minu Kim
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