Picture: ISTOCK
Picture: ISTOCK

PSG-controlled private education specialist Curro has hit the acquisition trail in SA again.

On Tuesday, it announced the purchase of Cooper College along with related business Magic Beings Crèche for an undisclosed sum.

The acquisition is not surprising since Curro hinted at acquisitions recently.

After the release in February of the results for the year to end-December, Curro Holdings CEO Andries Greyling reiterated that strategic acquisitions at competitive prices were continuously considered in addition to the company’s greenfield expansion programme.

Although Curro acquired Woodhill College, Grantleigh and Waterstone College not long after listing in 2011, in the past five years the company has concentrated on rolling out greenfields schools around SA.

At the end of December 2017 it had 50,000 pupils across 138 schools on 59 campuses. During financial 2017, more than R1.1bn was invested in the schools business, most notably R324m on new schools and campuses and R652m in the expansion of existing campuses.

African expansion

Curro indicated earlier in 2018 that it planned to invest up to R2.3bn in financial 2018. In recent years it has also focused its acquisition efforts on African expansion, with acquisitions in Namibia and Botswana.

Curro said the Cooper College acquisition was aligned with the company’s plans to expand its geographical footprint in Gauteng, as well as extend its education offering.

Cooper College is based in Randburg and was established it 2008 to offer international education programmes and qualifications to pupils from grades 0 to 7.

The school has about 1,000 pupils. Curro said plans were afoot to further develop the Cooper College campus and construct a private high school for up to 650 pupils.

Anthony Clark, an analyst at Vunani Securities, said the deal was an example of Curro stepping in when owner-managers of a school probably did not have the capital for expansion. He “guesstimated” the transaction was worth R200m, with indications that Cooper College generated about R25m in earnings before interest, taxes, depreciation and amortisation.

Curro would probably need to spend quite heavily in building a high school at Cooper College, but such a development could double profit at the school, Clark said.

The market, however, did not appear overly enthusiastic about the Cooper deal, with Curro shares only edging up 2.96%.

Shares in Curro, which trades on a demanding trailing earnings multiple of more than 60 times, have been under pressure since the unbundling of tertiary education business Stadio in late 2017.