IQE
23/03/2016 09:13
GENERAL
PRICE SENSITIVE
REL: 0913 HRS Intueri Education Group Limited
GENERAL: IQE: IQE Confirmation of new banking facility and OCA earn-out
IQE - INTUERI CONFIRMS NEW BANKING FACILITY AND OCA GROUP EARNOUT
o Confirmation of extension of the existing bank facility to March 2018, with
an additional debt facility of $20m taking the total facility to $80m
o Final earn out amount for The OCA Group acquisition confirmed as A$19.9m
o OCA earn out payment terms agreed, with A$15m payment in March 2016 and
deferral of remaining A$4.9m until June 2017
o Waiver obtained from NZX Listing Rule 9.2.1 for OCA related party
transaction
Intueri Education Group Limited (NZX/ASX: IQE) advises that its extended bank
facility is now in place, with an additional debt facility of $20m taking the
total facility to $80m. As previously advised, the $20m increase is to allow
for final acquisition payments for both the 50% shareholding in The OCA
Group, which Intueri acquired in January 2015 (taking it to 100%
shareholding), and for the New Zealand Institute of Sport and New Zealand
College of Massage (NZIS/NZCM) which were acquired in November 2015.
Commercial terms for the extended facility are broadly in line with existing
terms, although the debt covenant ratio will initially increase from 2.5 to
3.5 x EBITDA to accommodate the acquisition payments, and will then reduce to
current levels over the tenure of the facility. The bank facility is now for
two years, rather than three years as previously indicated. This shorter term
will allow Intueri to renegotiate a new facility in early 2018, post
completion of its 2017 financial statements.
Intueri has a supportive relationship with its bankers, positive operating
cash flows, and is focused on reducing debt over the next two years.
As previously advised, the final deferred consideration payable in 2016 for
the acquisition of The OCA Group increased from A$15m to A$19.9m due to the
outperformance of this business in 2015. A part payment of $A15m is to be
paid in March 2016, and the vendors have agreed to defer payment of the final
A$4.9m until June 2017.
An interest charge of 6.95% is payable on the deferred balance, and security
granted over the assets of the Australian group companies as part of this
arrangement. As the vendors of The OCA Group could be considered related
parties for the purposes of NZX Listing Rules, and providing security for the
deferred payment is a material transaction under the NZX Listing Rules, a
waiver from NZX Listing Rule 9.2.1 has been sought and granted.
-Ends-
For more information, please contact:
Rob Facer
Chief Executive & Director
+64 (0) 27 675 3538
[email protected]
Rod Marvin
Chief Financial Officer
+64 (0) 27 499 7822
[email protected]
End CA:00279734 For:IQE Type:GENERAL Time:2016-03-23 09:13:31
