Hong Kong-listed higher education provider China Xinhua Education Group is acquiring a majority stake in Fuda Company, which owns Haiyuan College and Kunming Health School, for 918 million yuan ($133 million).
In a disclosure to the Hong Kong Exchange, China Xinhua Education said an affiliated entity, Xinhua Group, will own a 60 per cent stake in Fuda Company, and by extension, in Haiyuan College and Kunming Health School. Upon completion of this deal, Fuda Company will be 40 per cent owned by Su Pingsen.
The deal will enable the Xinhua Group to further expand its school network and increase market penetration. It will also provide it with an entry into a strategic market, Yunnan.
“Considering Haiyuan College is a leading high-quality independent college in the country and Kunming Health School is a high-quality private secondary vocational school in China, there is a good synergy between them in teaching resources, majors, and school running,” the group disclosed.
Haiyuan College, founded in 2001 and located in Kunming, Yunnan Province, is a private institution of higher learning that provides undergraduate programmes, as well as an independent college approved by the Ministry of Education.
During the 2018-2019 school year, Haiyuan College had a student enrollment of approximately 12,026.
Kunming Health School was founded in 1953 and is a private secondary vocational school located in Kunming, Yunnan Province. During the 2018-19 school year, the school had approximately 6,247 enrolled students.
The 60 per cent equity interest in Fuda Company under the transaction only represents its sponsor interest in the target schools held under its name. It does not include the assets that shall be spun-off from the company by way of a demerger to be completed within two years after the agreement is sealed, according to the disclosure.