G8 Education has brushed aside its court battle in Singapore to press on with its acquisition spree in Australia.
The Gold Coast-based childcare centre operator yesterday announced it had bought six centres in southeast Queensland for $8.2 million.
The company has not disclosed the location of the centres, but it is understood some are on the Gold Coast.
The purchase price has been struck around G8′s preferred multiple of four times earnings, which will deliver earnings before interest and tax of more than $2 million a year.
“The acquisition of these additional centres will provide G8 Education the opportunity to expand its presence in southeast Queensland and increase the number of places we have to offer the community,” G8 managing director Chris Scott said.
“The acquisition continues to leverage the expertise of the head office team in a way that is earnings per share accretive.”
G8 said the purchase would be funded through an existing debt facility and that it would increase the number of centres in the company’s stable to 138.
The announcement came on the heels of G8 confirming it was on track to deliver on its forecast earnings for the current year.
G8 said it would post EBIT of $20.26 million for the year to the end of December and a net profit of $12.79 million.
A legal stoush over a Singapore acquisition has shaved more than $2 million from G8′s profit expectations for the 2011 financial year.
G8 Education was expecting a decision on its dispute with Singapore-based Cherie Hearts Group by early next year, following final submissions in December.
The dispute involves 13 of 70 childcare centres bought by G8 Education last year. Cherie Hearts, which still controls the 13 centres, is alleged by G8 to be in default of the purchase agreement but Cherie Hearts has denied the claims.
G8′s shares closed at 50c.