Tree House Education & Accessories Ltd has completed the acquisition of brand and assets of Brainworks, a national chain of pre-schools run by Brainworks Learning Systems Pvt Ltd, in an all-cash deal worth Rs 5 crore ($0.8 million), the company disclosed to the stock exchanges.
The firm entered into a deal to buy Brainworks earlier this year but did not disclose the amount.
Founded in 2008, Brainworks has been following a franchise model for its expansion. Its centres are located in Delhi-NCR, Punjab, Uttar Pradesh, Uttaranchal, Uttarakhand, Jammu & Kashmir, Gujarat, Maharashtra, Goa, Karnataka, Andhra Pradesh and Tamil Nadu.
Privately held Brainworks was part of Better Value Brands Pvt Ltd, which comprises group firms running companies and brands such as Talwalkars, Popular Prakashan, Better Value Restaurants, Lateral Heights and Naturals Ice Cream under its banner. The company is a joint venture formed by Vinayak Gawande, Anant Gawande, Harsha Bhatkal and Amit Mehendele. Lina Ashar’s Kangaroo Kids Education Ltd is the curriculum provider.
Commenting on the development, Rajesh Bhatia, managing director of Tree House Education & Accessories, said, “The Brainworks network ensures presence in new geographies where we are not present. Brainworks has 64 (13 self-operated centres and 51 franchisees) centres operating under its brand. We believe that as they absorb the Tree House method of education, curriculum and functioning, each of these centres will see significant improvement across all their operating parameters.”
The acquisition will be cash accreditive from the first year and the Brainworks business will pay back the total amount invested over the next 36 months, according to Tree House.
Talking about the brand portfolio and differentiation, Bhatia added, “The Tree House brand focuses on self-operated pre-schools while the Brainworks brand will focus on franchising and the Global Champs brand will focus on a self-operated model to help urban and rural community helpers.”
Last December, Tree House raised a little over Rs 41 crore from Aditya Birla Capital Advisors, the private equity arm of Aditya Birla Financial Services Group, and existing investor Omidyar Network. It also counts Ronnie Screwvala’s Unilazer Ventures as an investor.
Tree House is a six-year-old education firm founded by the husband-wife duo of Rajesh and Geeta Bhatia. It started operations in 2007 and raised the first round of funding from Matrix Partners. The company also raised approximately Rs 112 crore in its public issue around two years ago.
This is not the first initiative by Tree House towards inorganic growth. Last year, it acquired the pre-school business of MT Educare, a Mumbai-based K-12 tutoring and test preparation firm, for an undisclosed amount. The deal gave it six company-operated centres, located in Mumbai and Pune.
(Edited by Sanghamitra Mandal)