Partial exits for IDG, Jafco as China’s Tarena completes $137m IPO
IDG Capital Partners and Jafco have made partial exits from Tarena International after the Chinese IT training services provider raised $137.7 million through a NASDAQ IPO.
The company sold 15.3 million American Depository Shares (ADS) - comprising 11.5 million new shares and 3.8 million existing shares - at $9 apiece, according to a regulatory filing. The stock opened at $10.39 on Thursday and has since fallen by nearly 13% to trade just above the IPO price.
IDG sold 2.15 million shares in the offering, reducing its stake in the company from 23.6% to 19%, including the dilution effect. Jafco's holding has been trimmed from 15% to 11.2%, following the sale of 1.65 million shares. One of the two shareholders has granted underwriters an overallotment option to purchase up to 2.29 million addition shares.
Tarena's other institutional backer, Goldman Sachs, didn't exit any shares via the IPO. It now owns 30.7% of the company and is the largest individual shareholder, with Shaoyan Han, the founder, chairman and CEO, carrying a 28.3% interest.
According to AVCJ Research, IDG-managed funds provided Tarena's Series A round in September 2003 and then returned with Jafco - acting through Jafco Asia Technology Fund IV - for the Series B in November 2008.
Goldman invested $19.9 million in September 2011 via Goldman Sachs Investment Partners Master Fund and Goldman Sachs Investment Partners Private Opportunities Holdings.
Tarena claims to be the largest provider of IT professional education services in China, citing IDC research which shows the company had an 8.3% market share by revenues in 2013. It has trained more than 130,000 students since its inception in 2002, cooperated with 500 universities and colleges and placed students with around 35,000 employers.
The company offers a combination of live distance instruction, classroom-based tutoring and online modules. Classroom lectures are delivered in Beijing and shown via webcast to 92 directly operated learning centers in 33 cities nationwide.
China's professional education services market - post-secondary education programs focused on professional career advancement - grew from RMB48.8 billion (US$8.1 billion) in 2010 to RMB67.5 billion in 2013. It is projected to reach RMB89 billion by 2017. At the same time, the market is highly fragmented.
Tarena's enrollment numbers came to 46,458 in 2013, up from 16,282 in 2011. Revenues rose from $25.7 million to $92.8 million over the same period, while net income went from $700,000 to $14 million.
Goldman Sachs and Credit Suisse acted as joint bookrunners for the offering.
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