China's Four Seasons Education targets $111m US IPO

The company will sell 10.1 million American Depository Shares (ADS) at $9.00-11.00 apiece, according to a filing. This includes 900,000 ADS held by Crimson, with the rest of the offering comprising new shares. The IPO could be increased to 11.6 million shares if the overallotment option is fully exercised.

This would be the third China education offering in the US in a matter of weeks. RYB Education, a kindergarten operator backed by Ascendent Capital Partners, raised $144.3 million at the end of September and then Bain Capital-owned Rise Education – which provides after-school English tutoring services – raised $159.5 million. Both private equity investors made partial exits.

Four Seasons restructured offshore in 2014 and subsequently issued $9.6 million and $6.4 million in preferred shares to Chengwei and Crimson, respectively. However, the company was founded in 2007 and opened its first tutoring center three years after that. It has expanded from 10 learning centers in Shanghai in 2015 to 33 facilities across five cities, although Shanghai remains the core market. There were 116,294 student enrolments for the 2017 financial year, up from 77,947 the previous year.

Four Seasons claims that more than 250 of the 1,300 students admitted into Shanghai’s top five middle schools in 2016 – a total of 146,900 students graduated from elementary schools in the city that year – had taken at least one of its courses. In addition, 38 K-12 schools in Shanghai have invited Four Seasons teachers to deliver proprietary math courses since the company’s inception.

The company generated revenue of RMB203.2 million ($30.8 million) in 2017 financial year, up from RMB93.8 million for the previous 12 months. Over the same period, Four Seasons swung from a net loss of RMB31.1 million to a net profit of RMB17.3 million.

Chengwei, which will hold a 13.2% stake in the company post-IPO, invested through an evergreen vehicle that was established in 2004. Crimson’s capital came from its third fund, which closed at $300 million in 2006. The GP will own 8.7% of Four Seasons once the offering is completed.

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• Topics
• Greater China
• IPO
• Consumer
• China
• Education
• Exit
• Chengwei Ventures Shanghai