MindChamps in tie-up to enter China

SINGAPORE (The Straits Times/ANN) - The joint venture will have a fund for setting up and acquiring pre-school centres in the country. 

MindChamps PreSchool has signed a joint venture agreement with China First Capital Group (CFCG) that will allow it to make its first foray into China.

The joint venture (JV) will see the establishment of a fund that aims to raise an initial tranche of US$200 million (S$262 million) from the offering and sale of limited partnership interests to limited partners, MindChamps said in its announcement yesterday (Feb 18).

MindChamps and CFCG may also invest in the fund, which will be used to set up and acquire pre-school centres under the MindChamps brand in China.

First Capital Asset Management, which is indirectly wholly owned by CFCG, will be appointed as an investment adviser to the fund.

MindChamps and CFCG will also incorporate a new company, which will be appointed the master franchisee in China. MindChamps will own 49 per cent in the master franchisee; and CFCG, the remainder.

MindChamps will receive income from areas such as licence fees from the master franchisee as well as royalties from the pre-schools.

Mr David Chiem, chief executive of MindChamps PreSchool, said of its Champion Mindset pre-schools: "With the success of our research and implementation in Singapore, we are excited to now launch this breakthrough education model in China to make a difference to the children of China and the world at large."

Hong Kong-listed CFCG is a cornerstone investor in the company's initial public offering, which took place in November last year, as are Hillhouse Capital Management and Target Asset Management. Singapore Press Holdings, which owns The Straits Times, also holds a stake in MindChamps.

Mr Wilson Sea, chairman of CFCG, said: "CFCG highly values our tie-up with MindChamps and considers the JV as a core strategic platform of our education business in China. We are fully committed and firmly believe that MindChamps' investors will reap long-term benefits from their investments into the SGX-listed company."

According to a 2017 Deloitte education industry report, China's pre-school education market swelled to 380 billion yuan (S$78.6 billion, US$60 billion) in 2016, and is expected to exceed 540 billion yuan by 2020.

MindChamps was founded as an educational research centre in Australia in 1998, and opened its first pre-school in Singapore in 2008.

It is now the largest operator and franchisor of premium range pre-school centres here and the first such operator in Singapore to be publicly listed.

The company made its debut on the main board of the Singapore Exchange in November last year after raising S$46.2 million in its initial public offering at 83 cents per share.

MindChamps now has over 50, mostly franchisee-owned, pre-schools and enrichment centres in Singapore, Australia, Abu Dhabi, Dubai and the Philippines.

In December last year, the company inked a master franchise agreement to open 10 MindChamps pre-school centres and five reading centres in Myanmar, and another such deal to set up 20 pre-school and reading centres in Vietnam.

Shares of MindChamps closed up 0.5 cent, or 0.7 per cent, at 70.5 cents on Thursday (Feb 15).

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