CIBT Subsidiary To Increase Ownership Of Downtown Vancouver Property
Vancouver, B.C. January 24th, 2018 – CIBT Education Group Inc. (TSX: MBA, OTCQX International: MBAIF) (“CIBT” or the “Company”) is pleased to report that its wholly owned subsidiary, Global Education City Holdings Inc. (“Global Education Holdings”) has entered into a Purchase and Sale Agreement with the majority owner of the limited partnership that owns one of the GEC® branded downtown Vancouver properties to acquire that partner’s equity interest. This transaction is expected to close in March 2018.
On November 19th, 2015, Global Education Holdings structured the current limited partnership (“LP I”) to acquire a downtown Vancouver property for approximately $39.5 million and re-branded it under the GEC® brand. Since possession, the building’s rental revenue has increased from $4.8 million to $7.0 million due to Global Education Holdings’ business model and its pipeline of domestic and international students. Upon closing of this transaction, the other limited partner of LP I will exit their investment with a return of 138% in just over two years while Global Education Holdings will earn its portion of profit from this transaction.
Concurrent with this acquisition, Global Education Holdings will restructure ownership of the project which, upon completion, will result in Global Education Holdings or an affiliate earning a structuring fee and holding 40% of this GEC® project as compared to its current 20% ownership in LP I.
Total transaction value is approximately $57 million including closing costs, commision and professional fees. As of October 12th, 2017, the value of this property was appraised at $65.92 million. It will continue to operate under the GEC® brand and management.
“The proposed transactions serve as a prime example of how our business model has evolved from a traditional education company to a fully integrated student housing education business with a steady stream of recurring revenue,” commented Toby Chu, President, CEO, and Chairman of CIBT Education Group. “ By continuing to acquire undervalued assets and increase our ownership in various properties under our management, we can supply additional student housing to our students and students of other educational institutions while generating double to triple-digit returns for our shareholders and the other limited partners. We intend to continue to aggressively add to our existing bed count and capitalize on the rental shortage in Metro Vancouver.”
The closing of the transactions described in this news release are subject to certain conditions.
About CIBT Education Group:
CIBT Education Group Inc. is one of the largest education and student housing investment companies in Canada focused on the global education market since 1994. Listed on the Toronto Stock Exchange and U.S OTCQX International, CIBT owns business and language colleges, student housing properties, recruitment centres and corporate offices at 44 locations in Canada and abroad. Total annual enrollment for the group exceeds 15,000 students. Its education providers include Sprott Shaw College (established in 1903), Sprott Shaw Language College, Vancouver International College and CIBT School of Business. Through these schools, CIBT offers business and management programs in healthcare, hotel management, language training, and over 150 career, language and vocational programs. CIBT’s property investments are held by Global Education City Holdings Inc., an investment holding and management company focused on developing education related real estate such as student hotels, serviced apartments and education super centres totalling over $600 million. CIBT also owns Global Education Alliance (“GEA”) and Irix Design Group (“Irix Design”). GEA recruits international students for many elite kindergartens, primary and secondary schools, colleges and universities in North America. Irix Design is a leading design and advertising company based in Vancouver, Canada. Visit us online and watch our corporate video at www.cibt.net.
Chairman, President and Chief Executive Officer
CIBT Education Group Inc.
Investor Relations Contact: 1-604-871-9909 extension 318 or | Email: email@example.com
Some statements in this news release contain forward-looking information (the “forward-looking statements”). Forward-looking statements are statements that are not historical facts and in this news release include, without limitation, statements about continuing to acquire undervalued assets and increase CIBT’s ownership in various properties under its management, and generating double to triple-digit returns for its shareholders and the other limited partners. The forward-looking statements are subject to various risks, uncertainties and other factors (collectively, “Risks”) that could cause CIBT’s actual results or achievements to differ materially from those expressed in or implied by forward-looking statements. The Risks include, without limitation, the satisfaction of all closing conditions and the ability to raise the necessary commercial debt financing on acceptable terms. Forward-looking statements are based on the beliefs, opinions and expectations of CIBT’s management at the time they are made, and CIBT does not assume any obligation to update its forward-looking statements if those beliefs, opinions or expectations, or other circumstances should change, except as may be required by law.