Pembury group on the move
BMFI joins board, plans for three new campuses
PEMBURY Lifestyle Group (PLG), with the conclusion of a deal with the Black Manager’s Forum Investment Company (BMFI), has positioned itself for aggressive growth in South Africa’s listed education sector.
PLG said on Friday that Njabulo Mthembu, managing director of BMFI, would join the Pembury board after the forum had acquired a 15.7 percent shareholding of the schooling group for R55 million.
PLG, which listed on AltX on March 31 at R1 a share, is now trading at 60 cents to 62c, with a market capitalisation of around R200m.
Riaan van Jaarsveld, financial director at PLG, said the current market for private school pupils in South Africa was estimated at roughly R2.5 million.
“All the current private schools together cater for roughly 500 000 to 650 000 pupils, which leaves a big portion of the market that is currently untouched.”
PLG now has 19 schools in Gauteng and North West and this year plans to open three new campuses in Centurion‚ Roodepoort and Springs.
Van Jaarsveld said the group’s broad-based black economic empowerment was strengthened by BMFI.
“This together with BMFI network opens up new windows of opportunity for the group, bearing in mind that roughly 70 percent of our learners currently are from previously disadvantaged origin.
“Currently our schools follow the Caps and IEB models to cater for the community around the school.”
Van Jaarsveld said they were in the process of securing school properties which strengthen the balance sheet and provide security for lending when needed.
“We follow a shared services approach, with certain functions being performed centrally, while the schooling and education are done on school level with overview from the group companies.”
Announcements of the PLGBMFI deal were published in June and last month, regarding the binding share sale and subscription agreement.
The BMFI will acquire 57 million shares by the acquisition of 37 million existing shares from property vendors of PLG at R1 a share, totalling an acquisition consideration of R37m and the subscription for 20 million new PLG shares at a subscription price of 90c a share, totalling a purchasing consideration of R18m.
The resulting inflow of cash will be used to strengthen the company’s cash flow position, providing it with more funds for property acquisitions and planned capital expenditure.
‘All the current private schools together cater for roughly 500 000 to 650 000 pupils.’
PLG competes against JSElisted private schooling firms Curro schools and ADvTECH and un-listed Spark, which is also an affordable new entrant on the scene.
Mthembu said the PLG investment was a good fit with the forum’s investment focus on education among other sectors, as well as their long-term orientation.
“We are long-term holders with an average investment holding period of 15 years in our current portfolio and are pleased to support PLG fulfil its growth aspirations.”
PLG’s chief executive, Andrew McLachlan, said BMFI shared the vision of providing quality, affordable private education to the market, addressing a very real need for South Africa.
“The subscription will inject further funds to expand our campuses.”