Afya Limited Announces Closing of the Acquisition of UNIFIPMoc and Fip Guanambi

Rhea-AI Summary

Afya Limited (Nasdaq: AFYA) has closed its acquisition of Sociedade Padrão de Educação Superior Ltda (UNIFIPMoc and Fip Guanambi) for R$360 million, which includes R$31.1 million in net debt. This acquisition adds 160 medical school seats, increasing total seats to 2,303, potentially 2,611 with pending approvals. Net revenue for UNIFIPMoc was R$110 million in 2020, with a projection of R$121 million for 2024. The acquisition aims for an EV/EBITDA of 5.1x at maturity, enhancing Afya's position in Brazil's medical education sector.

Positive

• Acquisition adds 160 medical school seats, raising total to 2,303.
• Projected revenue growth from R$110 million in 2020 to R$121 million in 2024.
• Strategic expansion in medical education in Brazil, especially in Minas Gerais and Bahia.
• Expected EV/EBITDA of 5.1x at maturity, indicating favorable valuation.

Negative

• Full payment made in cash could strain liquidity.
• Dependence on pending Ministry of Education approvals for additional seats and potential payment of R$50 million.

NOVA LIMA, Brazil, June 01, 2021 (GLOBE NEWSWIRE) -- Afya Limited, or Afya (Nasdaq: AFYA) in addition to the Press Release released by the Company on October 22,2020, today announced the closing of its acquisition, through its wholly-owned subsidiary Afya Participações S.A., of 100% of the total share capital of Sociedade Padrão de Educação Superior Ltda (“UNIFIPMoc and Fip Guanambi”).

The aggregate purchase price (enterprise value) was R$360.0 million, including the assumption of a Net Debt of R$31.1 million. The equity value was paid 100% in cash in the date hereof. We expect an EV/EBITDA of 5.1x at maturity and post synergies.

UNIFIPMoc and Fip Guanambi are a post-secondary education institution with government authorization to offer on-campus, undergraduate courses in medicine in the states of Minas Gerais and Bahia. The reported Net Revenue for 2020 was R$ 110 million of which 59% comes from the medicine course. The 2024 projected Net Revenue for UNIFIPMoc and Fip Guanambi is R$ 121 million at full maturity, with medical courses representing 73% of this amount.

The acquisition will contribute 160 medical school seats to Afya, increasing Afya’s total medical school seats to 2,303, considering the closing of UNIGRANRIO acquisition the total number of seats will be 2,611. There are 40 additional seats still pending approval, which, if approved by the Ministry of Education, will result in a potential additional payment of up to R$50 million.

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 significance of Afya's acquisition of UNIFIPMoc and Fip Guanambi?

The acquisition enhances Afya's medical school capacity and revenue potential in Brazil's education sector.

How much did Afya pay for UNIFIPMoc and Fip Guanambi?

Afya paid R$360 million, including R$31.1 million in net debt.

What are the projected revenues after the acquisition?

The projected net revenue for UNIFIPMoc and Fip Guanambi is R$121 million for 2024, up from R$110 million in 2020.

How will the acquisition affect Afya's market position?

It will strengthen Afya's market position by increasing its total medical school seats and expanding its educational offerings.

What are the potential financial implications of the acquisition?

The acquisition could impact liquidity due to full cash payment and requires approval for additional medical school seats to realize full value.