(Source: PrimeNewswire)
BEIJING, Aug. 11, 2009 (GLOBE NEWSWIRE) -- ChinaCast Education Corporation (the "Company" or "ChinaCast") (Nasdaq:CAST), a leading for-profit, post-secondary and e-learning services provider in China, today announced it has entered into a definitive agreement to purchase the remaining 20% interest in The Foreign Trade and Business College ("FTBC") of Chongqing Normal University for $17.6 million. The Company will also pay an additional $2.3 million for a one-time profit distribution bringing the total purchase price to $19.9 million. On April 21, 2008, ChinaCast consummated the acquisition of 80% of Hai Lai Education Technology Limited ("Hai Lai"), the holding company which owns 100% of FTBC, for a total cash consideration of $65.8 million.
Based on the terms of the agreement, ChinaCast will pay 50% of the consideration within 10 days of signing in return for 20% of the remaining interest of the holding company of FTBC. The balance of 50% of the consideration will be paid by ChinaCast within 5 days after the registration of the transfer of ownership with the authorities. The portion of FTBC's EBITDA attributable to this acquisition is annualized to be US$2.1 million, based on 2Q09 results, and will be consolidated with the Company's financial results starting in the third quarter of 2009.
"Acquiring the remaining interest of our existing university is another step in our strategy to become a leader in the for-profit, post-secondary education sector in China," said Ron Chan, ChinaCast Chairman and CEO. "We are very pleased that that we will be able to close this acquisition to be accretive to our third quarter 2009 financials. Our plans are to expand the university's offerings by increasing degree and non-degree course offerings as well as to develop international higher education partnerships. Our balance sheet remains strong as we plan to acquire additional universities in the future to further broaden our curriculum and geographic coverage throughout China."
About The Foreign Trade and Business College of Chongqing Normal University
FTBC was established by private investors in 2002 as an independent college affiliated with Chongqing Normal University and is located in the southwest city of Chongqing, China's largest municipality in terms of area and population. The college offers four-year bachelor's degree and two-year diploma programs in finance, economics, trade, tourism, advertising, IT, music and foreign languages, all of which are fully accredited by the Ministry of Education. FTBC's campus has over 132 acres of land and 900 faculty and staff.
