Arco Platform Limited Closes the Acquisition of Escola da Inteligência

Nachrichtenquelle: Business Wire (engl.)
03.12.2020, 02:54  |  138   |   |   

Arco Platform Limited, or Arco (Nasdaq: ARCE), today announced that it has received the final antitrust approval from Brazil’s Administrative Council for Economic Defense (Conselho Administrativo de Defesa Econômica – CADE), with no conditions, for its previously announced acquisition of Escola de Inteligência Cursos Educacionais (“EI” or “Escola da Inteligência”). Following this final approval, Arco closed the acquisition today.

Escola da Inteligência is the largest social-emotional learning (SEL) solution in Brazil, serving more than 330 thousand students in 900 schools. EI was founded based on the Theory of Multifocal Intelligence, created by the psychiatrist, researcher and writer Augusto Cury. Mr. Cury has sold more than 30 million books in Brazil and has published his works in more than 70 countries.

“In our industry, brand reputation, quality and distribution are the winning factors, and they all take time to build. We are thrilled to welcome to our portfolio the leading solution in social-emotional learning, a company that has continuously pursued those factors. Together, Escola da Inteligência and Arco will offer high-quality cognitive and social-emotional educational solutions to more than 1.6 million students,” said Ari de Sá Neto, CEO and founder of Arco.

The deal unlocks large growth potential for Arco and Escola da Inteligência. First, it allows Arco to serve the exciting SEL vertical with the leading company in the sector. SEL offers favorable demand trends, further intensified by the COVID-19 pandemic, which have led to >30% organic growth for EI over the past years. Second, it significantly expands the cross-selling potential of both companies, as they share a similar profile of partner schools with a low overlap of existing clients. Finally, the accelerated rollout of technology features in EI’s solution and sales and marketing enhancements are expected to further drive customer satisfaction and demand for an already established and highly regarded solution.

About the Acquisition

The acquisition involves only the private sector business of Escola da Inteligência. The payment terms are:

  1. 60% of EI's shares valued at R$288 million, with R$200 million to be paid at closing and the remaining R$88 million in 2Q21. This implies an EV of R$480 million, 12.5x 2019 EBITDA. This value is subject to adjustments according to EI's 2021 ACV bookings.
  2. 40% of EI’s shares at 6.0x 2023 ACV (equivalent to 2.4x 2023 ACV), to be paid in 2Q23.

About Arco Platform Limited

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Arco Platform Limited Closes the Acquisition of Escola da Inteligência Arco Platform Limited, or Arco (Nasdaq: ARCE), today announced that it has received the final antitrust approval from Brazil’s Administrative Council for Economic Defense (Conselho Administrativo de Defesa Econômica – CADE), with no conditions, for …

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