Afya Limited Announces Entering into of Purchase Agreement for the Acquisition of UNIFIPMoc and Fip Guanambi

Rhea-AI Summary

Afya Limited (Nasdaq: AFYA) announced the acquisition of 100% of Sociedade Padrão de Educação Superior Ltda (UNIFIPMoc and Fip Guanambi) for R$360 million, payable in cash at closing. This strategic move adds 160 medical school seats, increasing Afya’s total to 2,303. UNIFIPMoc is expected to generate R$109 million in net revenue for 2020, primarily from medical courses, and projected revenue for 2024 is R$121 million. The acquisition enhances Afya's capacity and potential market share in medical education across Minas Gerais and Bahia.

Positive

• Expansion of Afya's medical school seats by 160 to a total of 2,303.
• Projected net revenue for UNIFIPMoc at R$121 million by 2024, predominantly from medical courses.
• Strategic acquisition expected to enhance market share in medical education.

Negative

• Acquisition costs of R$360 million could exert financial strain.
• Dependence on approval for additional 40 seats, which may add R$50 million to transaction costs.

NOVA LIMA, Brazil, Oct. 22, 2020 (GLOBE NEWSWIRE) -- Afya Limited, or Afya (Nasdaq: AFYA) today announced it entered into a purchase agreement for the 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 is R$360.0 million, adjusted by the Net Debt at the closing date, of which 100% is payable in cash on the transaction closing date.

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 expected Net Revenue for 2020 is R$ 109 million of which 63% 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, an expected EV/EBITDA of 5.1x at maturity and post synergies.

The acquisition will contribute 160 medical school seats to Afya, increasing Afya’s total medical school seats to 2,303. 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 to be lifelong medical learners from the moment they join us as medical students through their medical residency preparation, graduation program, and continuing medical education activities.

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

FAQ

What is the purpose of Afya's acquisition of UNIFIPMoc?

The acquisition aims to expand Afya's medical education capacity and market presence in Brazil.

What are the financial terms of the Afya acquisition?

Afya is acquiring UNIFIPMoc for R$360 million in cash, adjusted by net debt at closing.

What is the expected revenue impact of the acquisition for Afya?

The acquisition is projected to generate R$109 million in net revenue for 2020, increasing to R$121 million by 2024.

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

Afya will gain 160 additional medical school seats, raising its total to 2,303.

What could affect the total cost of the acquisition for Afya?

The potential approval of 40 additional medical school seats may lead to an extra payment of up to R$50 million.