| Log in

Tree House IPO Price Band At Rs 135-153; Valued Over Rs 500Cr

16 August, 2016

Tree House Education and Accessories Pvt Ltd, a school management company which operates pre-schools across India, is opening its public issue on Wednesday (August 10) which will value it at Rs 516 crore at the upper end of the price band.

Tree House, in which Matrix Partners India currently holds over 35 per cent stake, has announced a price band of Rs 135-Rs 153 per share for its initial public offering (IPO). The company will raise between Rs 114 crore and Rs 129 crore, depending on the final pricing of the issue that opens on August 10 and closes on August 12.

The company is planning to dilute 25.01 per cent stake through the issue. JM Financial Consultants and Motilal Oswal Investment Advisors are the book running lead managers to the IPO.

Tree House, founded by the Bhatia couple Rajesh and Geeta, had also raised a pre-IPO funding of Rs 19 crore, led by ON Mauritius (a subsidiary of Omidyar Network) at Rs 150 a share in May this year. With the pre-IPO funding, in which existing backers Matrix and Foundation Capital also participated, the company could be mopping up close to Rs 150 crore.

Matrix, which first invested in the firm three years ago, will be sitting on unrealised gains of over 2x at the upper end of the price band. Foundation Capital, which first invested in May, 2010, will also be sitting on gains of over 35 per cent.

Tree House, which started operations in 2007, operates pre-schools under the brand name of ‘Tree House’ and it has also branched out into providing educational services to K-12 schools. The company reported 96.74 per cent CAGR revenue growth between FY08 and FY11, amounting to Rs 41.15 crore. It also reported a profit after tax for FY11 at Rs 9.2 crore.

As of June 15, 2011, Tree House had 223 pre-schools (of which 149 are self-operated) across 33 cities. The company also provided educational services to 12 schools, which have over 5,000 students, in four cities.

Tree House plans to use the money raised through the public issue to open 120 new pre-schools by 2014 (Rs 41 crore), besides constructing the necessary infrastructure in Rajasthan and Gujarat (Rs 40 crore). It also plans to use the proceeds for acquiring office space (Rs 11 crore), procuring exclusivity rights to provide educational services (Rs 15.6 crore) and repayment of loan (Rs 28.5 crore).

The closest peer in the listed space is Zee Learn, the education business of Subhash Chandra’s Essel group. Zee Learn, which demerged and listed late last year, owns Kidzee, which has over 750 centres in more than 315 cities. Zee Learn, which had net profit of Rs 1.85 crore on revenues of Rs 45 crore, has a market cap of Rs 530 crore.

Other players in the space include Delhi-based Mothers Pride and Shemrock Schools, among others. Listed education services firm Educomp Solutions also owns Eurokids, where it picked up 50 per cent stake for Rs 39 crore in 2008.


Leave Your Comment
PE-Backed Preschool Firm Tree House Crashes On Stock Market Debut

PE-Backed Preschool Firm Tree House Crashes On Stock Market Debut

TEAM VCC 6 years ago
Matrix Partners backed-preschool management company Tree House Education and...
PE-backed Tree House Tweaks Expansion Plan, To Open More Pre-schools

PE-backed Tree House Tweaks Expansion Plan, To Open More Pre-schools

TEAM VCC 6 years ago
Matrix Partners-backed pre-school management company Tree House Education and...
Tree House Education Raises Rs 19Cr In Pre-IPO Round

Tree House Education Raises Rs 19Cr In Pre-IPO Round

Shrija Agrawal 6 years ago
Tree House Education and Accessories Pvt Ltd, a school management company that...
No Comments

Tree House IPO Price Band At Rs 135-153; Valued Over Rs 500Cr

Powered by WordPress.com VIP