From left: Dato’ Teo Chiang Quan, Chairman of Paramount Corporation Berhad; Mr Jeffrey Chew, Group Chief Executive Officer of Paramount Corporation Berhad; Mr Ee Ching Wah, President of REAL Education Group; and Mr Kee Keok Kuay, Founder of REAL Education Group.
Petaling Jaya, 11 January 2017 : Paramount Corporation Berhad (Paramount) today entered into an agreement to acquire a 66% stake in REAL Education Group from Character First Sdn Bhd for a total cash consideration of RM183 million, in the process emerging as one of the largest full-spectrum education services providers in Malaysia.
REAL Education Group, owned by holding company Character First Sdn Bhd, was established in 1985 and has a strong presence in the kindergarten, primary and secondary (K-12) segments. It has 3 key brands – REAL Kids, REAL Schools and the Cambridge English for Life, with a total of 18,000 students across 30 REAL Kids centres, 6 international and private schools in 3 campuses, and 60 Cambridge centres, the latter both wholly-owned and franchised.
Speaking at a media briefing held in conjunction with the signing ceremony today, Paramount Group Chief Executive Officer, Jeffrey Chew said, “The primary and secondary school segment is an important component of Paramount Education – we can either choose to grow organically or we can achieve scale efficiently by investing in the right partner. REAL offers us the opportunity to do the latter; it is a strong K-12 brand that complements our existing offerings.
“With its instant access to an additional 18,000 students, the investment allows us to accelerate the growth plans for the Paramount Education division, establish a strong leadership position in the K-12 sector, and concurrently build a strong base of recurring income for Paramount Group,” he said.
He added that the acquisition also provides Paramount Education the opportunity to offer a more affordable alternative for high quality K-12 education, in turn allowing the Group to reach out to a wider student universe especially the kindergarten market.
“We also see synergies in many areas, from staffing and training, marketing and shared services, as well as opportunities for student continuity and retention, with REAL Kids kindergarten students moving to our Sri KDU national and international schools, and REAL School students moving to our KDU University Colleges,” he said.
In his briefing, Chew said that REAL has a strong track record, a strong bench of managers and professionals on its team, a healthy student population of 18,000 and is in a fee segment that complements Paramount Education’s existing schools. The 66% acquisition allows the founders and current REAL leadership team to stay on as minority shareholders to share their experience and knowledge, and to take REAL to new heights together.
The acquisition, said Chew, will be funded through internally generated funds and bank borrowings. Credit Suisse is acting as exclusive financial advisor to Paramount for the acquisition.