Tarena Signs Equity Transfer Agreement to Dispose of Professional Education Business

Rhea-AI Summary

Tarena International, Inc. (NASDAQ: TEDU) has announced the disposal of all equity interests in the professional education business to a buyer consortium led by Tarena Weishang Technology (Hainan) Co., Ltd. The transaction is expected to close around the end of March 2024.

Insights

Financial Analyst

The divestiture of Tarena International's professional education business represents a strategic pivot that could significantly affect the company's financial structure and market positioning. The sale to a buyer consortium, which includes an affiliate of the company's founder, suggests an insider's confidence in the business's potential, which might be perceived positively by the market. However, it also raises questions regarding potential conflicts of interest and the valuation process.

Financially, the transaction will likely result in a one-time gain or loss on the sale, depending on the terms and the carrying value of the assets sold. It's crucial to examine the transaction's terms once disclosed, as they will impact Tarena's balance sheet and liquidity. The proceeds from the sale could be used to pay down debt, invest in other areas of the business, or be returned to shareholders. The impact on earnings will also be noteworthy, as the divestiture will remove a segment of revenue and associated costs.

Industry Analyst

The IT education sector in China has been facing regulatory challenges and companies are adapting their business models accordingly. Tarena's decision to sell its professional education business could be a response to these challenges or a strategic move to focus on more profitable segments. The involvement of Kroll, LLC as an independent financial advisor lends credibility to the process and helps mitigate concerns about the transaction's fairness, especially given the related-party nature of the deal.

For stakeholders, the long-term implications hinge on Tarena's strategic direction post-transaction. If the company reinvests effectively in its remaining business lines or finds new growth avenues, the disposal could be beneficial. Conversely, if the divestiture leads to a loss of competitive edge or market share, the impact could be negative. Stakeholders should monitor the company's post-transaction strategy and execution closely.

Legal Expert

The equity transfer agreement's announcement, especially with an insider being part of the buying consortium, necessitates a thorough review of the transaction's legal framework to ensure compliance with securities and corporate governance regulations. The related-party aspect of the deal requires a heightened level of disclosure and scrutiny to prevent conflicts of interest and protect minority shareholders' rights. The role of Kroll, LLC will be to provide an objective valuation and fairness opinion, which will be critical in assessing the deal's propriety.

From a legal standpoint, the successful closure of the transaction will depend on regulatory approvals and adherence to any conditions set forth by authorities. Shareholders and potential investors should look for transparency in the transaction's terms and the strategic rationale provided by Tarena's management.

BEIJING, Dec. 26, 2023 /PRNewswire/ -- Tarena International, Inc. (NASDAQ: TEDU) ("Tarena" or the "Company"), a leading provider of IT professional education and IT-focused supplementary STEAM education services in China, today announced that it has signed an equity transfer agreement (the "Equity Transfer Agreement") to dispose of all equity interests in the professional education business to a buyer consortium led by Tarena Weishang Technology (Hainan) Co., Ltd (the "Disposal Transaction"). Ms. Lijuan Han, affiliate of the Company's founder and chairman Mr. Shaoyun Han, is a member of the buyer consortium and has an interest in the Disposal Transaction. Kroll, LLC was retained as the independent financial advisor in connection with the Disposal Transaction. The Disposal Transaction is expected to close around the end of March 2024.

About Tarena International, Inc.

Tarena is a leading provider of IT professional education and IT-focused supplementary STEAM education services in China. Through its innovative education platform combining live distance instruction, classroom-based tutoring and online learning modules, Tarena offers professional education courses in IT and non-IT subjects. Its professional education courses provide students with practical skills to prepare them for jobs in industries with significant growth potential and strong hiring demand. Tarena also offers IT-focused supplementary STEAM education programs, including computer coding and robotics programming courses, etc., targeting students between three and eighteen years of age. Aiming to encourage "code to learn," Tarena embraces the latest trends in STEAM education and technology to develop children's logical thinking and learning abilities while allowing them to discover their interests and potential.

Safe Harbor Statement

This press release contains forward-looking statements made under the "safe harbor" provisions of Section 21E of the Securities Exchange Act of 1934, as amended, and the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "confident" and similar statements. Tarena may also make written or oral forward-looking statements in its reports filed with or furnished to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Any statements that are not historical facts, including any business outlook and statements about Tarena's beliefs and expectations, are forward-looking statements. Many factors, risks and uncertainties could cause actual results to differ materially from those in the forward-looking statements. Such factors and risks include, but not limited to the following: Tarena's goals and strategies; its future business development, financial condition and results of operations; its ability to continue to attract students to enroll in its courses; its ability to continue to recruit, train and retain qualified instructors and teaching assistants; its ability to continually tailor its curriculum to market demand and enhance its courses to adequately and promptly respond to developments in the professional job market; its ability to maintain or enhance its brand recognition, its ability to maintain high job placement rate for its students, and its ability to maintain cooperative relationships with financing service providers for student loans.

Further information regarding these and other risks, uncertainties or factors is included in Tarena's filings with the U.S. Securities and Exchange Commission. All information provided in this press release is current as of the date of the press release, and Tarena does not undertake any obligation to update such information, except as required under applicable law.

For further information, please contact:

Investor Relations Contact
Tarena International, Inc.
Email: ir@tedu.cn

View original content:https://www.prnewswire.com/news-releases/tarena-signs-equity-transfer-agreement-to-dispose-of-professional-education-business-302022303.html

SOURCE Tarena International, Inc.

FAQ

What did Tarena International, Inc. (NASDAQ: TEDU) announce?

Tarena International, Inc. (NASDAQ: TEDU) announced the disposal of all equity interests in the professional education business to a buyer consortium led by Tarena Weishang Technology (Hainan) Co., Ltd.

When is the Disposal Transaction expected to close?

The Disposal Transaction is expected to close around the end of March 2024.