Key highlights
Schrole and TES have entered into a Scheme Implementation Deed under which it is proposed TES will acquire 100% of Schrole for 48.52 cents per share by way of a scheme of arrangement (Scheme).
The cash consideration of 48.52 cents per Schrole share (Scheme Consideration) represents a 203% premium to the Schrole closing price of 16.0 cents on 14 June 2024.
TES is a leading education technology platform supported by the world’s largest community of teachers, creating intelligent online products and services. TES supports over 19,000 domestic UK, Australian and International schools globally with various digital solutions. TES is wholly owned by Onex Partners, a Canadian private equity firm that is a wholly owned subsidiary of Canadian investment manager Onex Corporation (TSX: ONEX).
It is anticipated that Schrole shareholders will meet in September to vote on the Scheme.
Schrole’s Board unanimously recommends that Schrole shareholders vote in favour of the Scheme in the absence of a Superior Proposal and subject to an Independent Expert concluding that the Scheme is in the best interests of Schrole’s shareholders.
17 June 2024: Schrole Group Ltd (ASX: SCL) (“Schrole” or the “Company”), is pleased to announce that it has entered into a Scheme Implementation Deed (SID) with TES Aus Global Pty Limited, a subsidiary of TES Global Limited (TES) for the acquisition of 100% of Schrole’s issued capital by way of a Court-approved scheme of arrangement for a cash price of 48.52 cents per Schrole share. The Scheme values Schrole’s equity at $18.15m1. A cash price of 48.52 cents per Schrole share represents:
a premium of 203% to the closing price of Schrole shares on 14 June 2024 of 16.0 cents, being the last price prior to the announcement of this Scheme;
a premium of 160% to the 30-day volume weighted average price of 18.7 cents; and
a premium of 47% to the highest recorded daily closing share price in the previous 12 months of 33.0 cents on 20 October 2023.
Details of the Scheme Implementation Deed
Implementation of the Scheme is subject to limited conditions including, amongst other things:
receipt of required regulatory approvals (including FIRB approval);
the approval of Schrole shareholders in accordance with the Corporations Act;
no material adverse change in respect of Schrole or no Schrole prescribed occurrence, no Schrole regulated event, no breach of undertakings or representations and warranties given by Schrole;
no breach of undertakings or representations and warranties given by TES;
Schrole having cash, working capital and Annualised Recurring Revenue above minimum levels immediately prior to the second court date; and
other customary conditions to a scheme of arrangement such as Australian court approval and an Independent Expert concluding (and continuing to conclude) that the Scheme is in the best interests of Schrole shareholders.
Implementation of the Scheme is not subject to any financing condition nor any due diligence condition. Under the SID, Schrole is bound by customary exclusivity provisions including “no shop”, “no talk” and “no due diligence” restrictions, a notification obligation and a matching right in favour of TES, subject to Schrole Directors’ fiduciary obligations where appropriate.
The SID also details the circumstances under which a break fee may be payable by Schrole to TES under certain customary circumstances.
The Scheme is expected to be implemented in or around September 2024, subject to Schrole shareholder approval, Court approval, and other relevant conditions being satisfied.
Full details of the Scheme are set out in the SID, a copy of which accompanies this announcement.
Alliance Agreement
In parallel to signing the SID, Schrole and TES have also entered into an Alliance Agreement, under which both parties will use reasonable endeavors to collaborate on commercial opportunities.
Schrole Board Recommendation
The Schrole Board unanimously recommends that Schrole shareholders vote in favour of the Scheme, and each Director intends to vote all of the Schrole shares controlled or held by, or on behalf of, them, representing approximately 11.0% of Schrole’s issued shares, in favour of the Scheme, in the absence of a superior proposal and subject to an Independent Expert concluding (and continuing to conclude) that the Scheme is in the best interests of Schrole shareholders.
The Schrole Board believes the Scheme provides:
Significant premium for control:
-a premium of 203% to the closing price of Schrole shares on 14 June 2024 of 16.0 cents, being the last price prior to the announcement of this Scheme; and
-a premium of 160% to the 30-day volume weighted average price of 18.7 cents.Certainty of value: The Scheme provides certainty of value to Schrole shareholders and the opportunity to sell 100% of their shareholdings for cash.
Limited conditionality: The Scheme is subject to limited customary conditions including Court approval, Schrole shareholder approval, prescribed occurrences and no material adverse change. It is not subject to financing.
Rob Graham, the Managing Director and CEO of Schrole, said today: “The Board of Schrole believes this transaction represents a compelling opportunity for Schrole shareholders to realise immediate and certain value. We believe our deep expertise and focus on delivering outstanding outcomes for our clients will be enhanced by the breadth of resources and strong market reputation that TES brings. Working with TES will provide excellent outcomes for our clients and our team, and we look forward to partnering with the organisation going forward.”
Indicative Timetable and Next Steps
Schrole shareholders do not need to take any action at this stage.
Subject to Court Approval, a Scheme Booklet is expected to be provided to Schrole shareholders in or around early August 2024.
The Scheme Booklet will contain information relating to the Scheme, the reasons for the Schrole Board’s unanimous recommendation, details of the Scheme meeting as well as an Independent Expert’s Report providing an assessment as to whether the Scheme is in the best interests of Schrole shareholders. Schrole shareholders will then have the opportunity to vote on the Scheme at a Court-convened Scheme meeting, which is currently expected to be held in or around September 2024.
As mentioned above, the Scheme is subject to a number of conditions. Accordingly, the certainty of and timing for the completion of the Scheme cannot be confirmed at this time and any guidance on the timetable should be treated as indicative at this stage.
Schrole will keep shareholders and the market informed in accordance with its continuous disclosure obligations.
Advisers
Schrole is being advised on the proposed Scheme by Latimer Partners as corporate adviser and Hamilton Locke as legal adviser.
TES is being advised by DLA Piper as legal adviser.
ENDS
This release was authorised by the Board of Directors.
For further information please contact:
Investors
RobGraham
Managing Director
SchroleGroupLtd
Investors@schrole.edu.au
About Schrole
Schrole provides global Human Resources Software-as-a-Service (SaaS) targeting teachers and educational organisations. Schrole is scaling globally and targeting new growth markets.
Schrole HR is a complete Human Resources SaaS solution, combining recruitment, background checks,onboarding, relief teacher management, and professional development.
Schrole Connectis education’s most advanced recruitment and applicant tracking app.
Schrole Events, provides industry-leading online recruitment events.
Schrole Coveris a cloud-based software platform that engages relief staff at the touch of a button.
Schrole Verify provides background screening to the international schools’ sector.
Schrole Developprovides accredited professional development solutions contextualised to client needs.
Schrole Engage provides onboarding and contract management software for schools
About TES
TES is a leading education technology platform supported by the world’s largest community of teachers. TES powers schools and enables great teaching worldwide, by creating intelligent online products and services to make the greatest difference in education. TES supports over 19,000 domestic UK, Australian and International schools around the world with software to solve some of their biggest and most critical challenges. With millions of educators registered on our platform from around the globe, TES provides a number of high-value services to schools underpinned by a thriving content business aimed at individual teachers, including teaching resources, quality editorial content, job opportunities and teacher training.
Forward Looking Statements
Statements contained in this release, particularly those regarding possible or assumed future performance, revenue, costs, dividends, production levels or rates, prices, or potential growth of the Company, are, or may be, forward looking statements. Such statements relate to future events and expectations and, as such, involve known and unknown risks and uncertainties. Actual results and developments may differ materially from those expressed or implied by these forward-looking statements depending on a variety of factors.