From: "Jeffrey E." <jeevacation@gmail.com>
To: Eileen Alexanderson
Subject: Re: KUE
Date: Mon, 10 Nov 2014 22:17:49 +0000
timber?
On Mon, Nov 10, 2014 at 5:12 PM, Eileen Alexanderson > wrote:
Teleconference of KUE partner meeting finished a little while ago. The attached, which I sent last week, is a
good summary of the situation.
From today's meeting:
-deal in hand for the sale of the Intl operation in Singapore for net proceeds of $108.2mil was announced at the
meeting. Also KUE has a signed term sheet, with a exclusivity period only until Dec 8th, for the sale of the
Canadian Intl School which would net $248mi1. Combined $357mi1 net proceeds after debt repayment is a bit
below guidance I had been given of $400mi1 and a bit will be held back in an escrow account. Guidance was
for a late Dec or Jan distribution of proceeds which would be roughly $5mi1 to us.
-Propco — mindset toward monetizing but sounded like there is no firm shape for a deal yet i.e. whether they
will sell to a REIT or form a new RE company and lever. Property portfolio is a bit of flux reflecting
disposition of centers closed by Opco over the past several years. KUE would like LPs to have option of two
ways out — cash or equity in survivor.
As I indicated in the note, for extension to Oct 2016, Intl and Propco must be monetized by Oct 2015.
-Opco — core early childhood care centers are growing again — EBITDA est for 2014 is $118mil, up from
$89mi1 in 2013. Plan shows goal of $142mil in 2015 and $162mil in 2016. Co suggested valuation at 10x
EV/EBITDA seems appropriate given fact that public comp, Bright Horizons, trades at 15x EV/EBITDA but is
supported by 14% ebitda margin compared to Opco at 9.3% currently and future forecast of 10%.
Eileen Alexanderson
Elysium Management
445 Park Avenue
Suite 1401
New York NY 10022
Phone:
Email:
EFTA01000513
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