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Evolve shares climb on NZX debut

Shares of Evolve Education Group rose 7% on its NZX debut.

Suze Metherell
Fri, 05 Dec 2014

See Also: Evolve listing signals corporatisation of childcare sector

Shares of Evolve Education Group [NZX: EVO], the childcare business, rose 7 percent on its NZX debut after its initial public offer raised $132.3 million in new capital to fund its acquisitions in early childhood education. 

The stock first traded at $1.07, up from its $1 offer price, and valuing the company at $189.5 million. The Auckland-based company, set up in May by Greg Kern and Russell Daly of Queensland-based Kern Group, issued 132.3 million in new shares, adding to the existing 8.1 million, to fund its acquisition of several New Zealand childcare businesses, including Lollipops Educare, the in-home childcare Porse Group, Wellington-based I-Kids and Christchurch-based Artemis Learning, as well as pay off offer costs.

“The very strong support for the IPO from a range of investors is an endorsement of the quality of the assets that will make up Evolve Education," Norah Barlow, Evolve's chair and former chief executive of retirement village operator Summerset Group Holdings, said in a statement. "We acknowledge the support that new shareholders have placed in the company’s ability to deliver on its goals.” 

Post-float new shareholders hold a 75 percent stake of the business, with Lollipop vendors taking a 20 percent stake. Queensland-based Hayes Knight Business Services holds 0.3 percent. The Evolve model follows the successful float of Australia’s Affinity Education Group which listed on the ASX in December 2013, raising A$75 million to buy 57 childcare centres and to list. Affinity listed at A$1 per share and last traded at A$1.18 despite reporting a half-year loss of A$5 million compared to a A$2.6 million forecast profit in its prospectus.

Evolve settled its purchase of Lollipops and Porse yesterday, and yesterday announced it had bought Au Pair Link New Zealand, the Australasian nanny business founded by Cecilia Robinson, who is also behind the My Food Bag business. 

According to Evolve's prospectus, the company forecasts a loss of $9.5 million on $29 million of sales in the year ending March 31, 2015, which only covers three and a half months trading, before turning to a profit of $16.6 million on sales of $136 million in the subsequent year.

Goldman Sachs New Zealand and Forsyth Barr were Joint Lead Managers to the offer.

(BusinessDesk)

Suze Metherell
Fri, 05 Dec 2014
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Evolve shares climb on NZX debut
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