Chinese education services provider Minsheng Education Group is acquiring TCL Educational Web from TCL Technology, an affiliate of state-backed electronics maker TCL Corporation, for 420 million yuan ($59 million).
Minsheng Education Technology, a wholly-owned subsidiary of Minsheng, will purchase over 5.52 million shares in TCL Educational Web, said the seller in a filing with the Hong Kong Stock Exchange (HKEX) on Wednesday.
The acquisition comes at a time when the Chinese online education market is at 251.76 billion yuan ($35.47 billion) in 2018, with an estimated growth rate of 16-24 per cent in the next three to five years, according to market research firm iResearch.
The online education market has further seen a surge in demand as nearly 100 million students in China have been put out of their schools since the Lunar New Year amid the coronavirus pandemic. Most of them are resorting to live-streaming classes and online learning at home.
Minsheng considers the online and offline education integration as “the primary industry trend” in line with the national policy orientation and the company’s “campus education plus online education” strategy, it said.
After the transaction, Minsheng will indirectly hold 80 per cent shares in Chinese distance examination service Silk Road, which operates an online examination site for the Chinese Proficiency Test (HSK) network, and another 50 per cent stake in China’s largest distance education service provider, Open Distance Education.
Open Distance Education, established in September 2003, primarily offers academic education services, massive open online course (MOOC) education, continuing education for teachers and vocational education.
The company delivers MOOC education on the IMOOC platform, which was launched in September 2013 and has developed into the largest mobile internet IT online education service in China. The platform had about 7.16 million registered users and 200,000 paying users worldwide as of December 31, 2019.
Minsheng, the Hong Kong-listed provider of higher education in China, is seeking to create synergies by combining its existing campus education and online education resources with Open Distance Education.
The company operates and manages 11 schools across China with the enrollment of 74,450 students as of 30 June 2019, up 71.8 per cent year-on-year, according to its interim report in 2019.