Introduction

We are pleased to share with you a summary update of market valuations and activities in the Asia Pacific education services industry for the second half of 2019.

Education is one of the key sectors in which Armor specializes in and closely follows market trends.Please contact us for further discussion

Valuations of Asia Pacific’s public companies were lower over last 5 quarters ending December 2019. EBITDA multiples were over 29% lower by the end of Q4-2019 (12.0x in Q4-2019 vs 17.1x in Q3- 2018).

Based on around 250 selected companies, the table above illustrates that industry returns and leverage ratios have been relatively stable over the past five years. Companies margins reflect an upwards trend (EBITDA margin +4.6% between 2016 and beginning of May 2020).

Overall, Q3-2019 and Q4-2019 was characterized by lower M&A deal count, while total transaction value continue to show large fluctuations. In particular, the total transaction value in Q3-2019 was pushed up by a few large deals (e.g. Jinan Shuangsheng Education Consulting Company Limited – EV USD 234m).

Armor selected the largest M&A transactions across the region in H2 2019 for which information on Implied Enterprise Value (EV) was available.