Afya Limited Announces Closing of the Acquisition of FCMPB - Faculdade Ciências Médicas da Paraíba

Rhea-AI Summary

Afya Limited (Nasdaq: AFYA) has successfully closed its acquisition of 100% of FCMPB for an enterprise value of R$380 million. The payment structure consists of 50% in cash at closure and the remaining 50% in four cash installments until 2024, adjusted by the CDI rate. FCMPB, a post-secondary institution authorized to offer medical courses in Paraíba, represents 99% of its 2019 net revenue from the medical program. Projected net revenue for FCMPB in 2024 is R$107 million, with an estimated post-synergy EV/EBITDA of 5.9x, adding 157 medical school seats to Afya’s portfolio.

Positive

• Acquisition expands Afya's education capacity by adding 157 medical school seats.
• Projected net revenue of R$107 million for FCMPB in 2024 significantly boosts future earnings.
• Post-synergy EV/EBITDA of 5.9x indicates favorable financial metrics post-acquisition.

Negative

• 50% of the purchase price contingent on future cash installments could strain cash flow.
• Integration challenges may arise from merging FCMPB's operations into Afya.

NOVA LIMA, Brazil, Nov. 09, 2020 (GLOBE NEWSWIRE) -- Afya Limited, or Afya (Nasdaq: AFYA) in addition to the Press Release released by the Company on August 20,2020, today announced the closing of its acquisition, through its wholly-owned subsidiary Afya Participações S.A., of 100% of the total share capital of FCMPB.

The enterprise value was R$380 million and the net debt was estimated in R$ 87 thousand. The net purchase price was paid (i) 50% in cash on the transaction closing date, and (ii) 50% is payable in cash in four equal installments through 2024, adjusted by the CDI rate.

FCMPB is a post-secondary education institution with government authorization to offer on-campus, undergraduate courses in medicine in the State of Paraíba and medical course represents 99% of its 2019’s Net Revenue. The projected Net Revenue for FCMPB in 2024, when the institution will reach maturation, is R$ 107.0 million representing an estimated post synergies EV/EBITDA of 5.9x all derived from its medical school.
The acquisition will contribute 157 medical school seats to Afya. FCMPB has 850 medical students and a potential of 1,130 medical students at full maturity in 2024.

About Afya

Afya is a leading medical education group in Brazil based on number of medical school seats, delivering an end-to-end physician-centric ecosystem that serves and empowers students and physicians to transform their ambitions into rewarding lifelong experiences from the moment they join us as medical students through their medical residency preparation, graduation program, continuing medical education activities and offering digital products to help doctors enhance their healthcare services through their whole career.

Contact: Investor Relations: ir@afya.com.br

FAQ

What is the value of Afya's acquisition of FCMPB?

The acquisition has an enterprise value of R$380 million.

How is the purchase price structured for the FCMPB acquisition?

The purchase price is 50% in cash at closing, and 50% in four equal installments through 2024, adjusted by the CDI rate.

What is the projected net revenue for FCMPB in 2024?

The projected net revenue for FCMPB in 2024 is R$107 million.

How many medical school seats will Afya gain from the FCMPB acquisition?

Afya will gain 157 additional medical school seats from the acquisition of FCMPB.

What percentage of FCMPB's 2019 revenue came from medical courses?

Medical courses represented 99% of FCMPB's net revenue in 2019.