CFA Society Singapore
SINGAPORE (May 21): Chip Eng Seng (CES) is planning to acquire up to 75% in Pennsylvania-based American Scholar Group (ASG) for US$1.5 million ($2 million).
ASG is a full-service education consulting organisation which facilitates study-in-America opportunities for both students and educators by placing them into ASG’s partner schools including K-12 schools, colleges and universities.
The acquisition comes after the construction and property group in March announced plans to diversify into the education sector to widen its income base.
Under the terms of the investment agreement, subsidiary CES ASG (CESA) has granted an unsecured convertible loan of US$0.5 million in lump sum to ASG for an initial 36 months from today, which ASG is due to repay on May 21 2021.
ASG, in turn, has granted CESA an option to subscribe for up to 26,853 million new shares in the US company’s stock at the aggregate subscription price of US$1 million.
Should CESA exercise its loan conversion right and subscription option, CESA would hold 75% of the capital of ASG’s enlarged shareholdings.
In a filing on Monday, CES says it sees ASG as an opportunity for the group to expand the scope of its education business, and that it seeks to leverage on ASG’s expertise in education consulting services for CES to possibly provide similar services in Asia Pacific, the broader region and even globally should the opportunity arise.
“[CES] recognises ASG’s years of experience in providing full-service education consulting services, which has helped many international students gain access to education opportunities in the USA, and smoothened their transition and integration into a new environment and culture which may be unfamiliar to them,” says the group.
ASG founders, David Ho Voon Way and Ng Ching Ching, have provided a joint guarantee for the target’s performance.
Shares in CES closed 0.5% lower at 95 cents on Monday.