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MindChamps PreSchool Limited’s IPO: 4 Growth Areas Investors Should Know

MindChamps PreSchool Limited filed its initial public offering (IPO) prospectus last Friday.

At the time of the filing, MindChamps PreSchool had a network of 54 centres. 10 centres are owned and operated by the company itself, while another 44 are owned and operated by franchisees. There is much more we can learn about the company as we go through its prospectus.

In our previous article, we learnt how MindChamps PreSchool earns its revenue. But that was what happened in the past.

Today, we will cast our eyes into the future and how the firm can grow its revenue. Here are four possible ways (for the first two, head here):

3. Merger, acquisitions, joint ventures and partnerships

MindChamps PreSchool’s IPO is aimed towards expansion of its business, which includes potential acquisitions.

The preschool operator has a history of acquiring other companies to expand its business. For example, in 2011, it bought 100% of A&I Edu Investments and 51% of Enkindle, and turned both into MindChamps branded PreSchools. Three years later, MindChamps PreSchool took over 100% ownership in Bentley Institute to expand its reach into higher education programmes.

The most recent acquisition occurred on 10 November 2017 when MindChamps PreSchool acquired four preschool centres in Australia for A$15.75 million. To finance the acquisition, it took on a loan of S$13.3 million from local banker, Oversea-Chinese Banking Corporation Limited (SGX: O39).

MindChamps PreSchool expects to raise S$47.6 million in gross IPO proceeds and has earmarked S$6.1 million for the acquisition of the four Australian preschools.

On top of that, it has also plans to spend another S$34.5 million to fund its expansion plans, which includes potential acquisitions. MindChamps PreSchool has indicated that it is identifying additional regions in Australia and other countries for future acquisitions.

4. A wider product range

MindChamps PreSchool plans to offer more services in its existing centres.

For one, it plans to expand its infant care services, which are focused on children between the age of two months and 18 months. Due to the nature of the services offered, where the staff-to-infant ratio is higher than its preschool, it will need to hire and train more staff.

Additionally, MindChamps PreSchool has signalled its intent to launch Actos Centres Kids. The class is designed to help children become more confident, creative and collaborative through theatre.

Elsewhere, it will dive deeper into improving the nutritional value of its student meals. The preschool operator has introduced natural organic foods to provide a holistic student experience.

If you would like to learn more about MindChamps PreSchool, you can click here.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong doesn’t own shares in any companies mentioned.