29th April 2014 - G8 Education Limited to acquire 7 premium childcare and education centres

Listed Queensland-based childcare and education centre operator G8 Education limited (ASX: GEM) is pleased to announce that it has contracts in place that give it the right to acquire 7 premium childcare and education centres from a number of different vendors.
GS Education Limited has contractual arrangements with each of the vendors, conditional upon customary licensing and landlord approvals. The acquisitions will be funded from existing cash and bank facilities. Subject to these conditions being satisfied the acquisitions are expected to settle before the end of August 2014.
The total purchase price for the 7 centres is $16.3 million payable at settlement. The purchase price is based on 4 times anticipated EBIT for the 12 months post settlement.
G8 Education limited Managing Director, Chris Scott, said: '7he acquisition of these premium centres at 4 times anticipated EBIT for the 12 months post settlement is a clear indicator of the depth, breadth and fragmentation of the Australian Childcare sector.
The centres are expected to contribute to EBIT immediately upon settlement.
This transaction will increase the number of places by 495 and continues G8's expansion in a way that is earnings per share accretive.