RYB Education Expands Into Singapore with Latest Acquisition, Plans Name Change
The stock of the Beijing early education provider closed at $7.73 per share, down nearly 3 percent.
Shares in RYB Education Inc. (NYSE: RYB) closed nearly 3 percent down on Wednesday at $7.73 apiece after the company announced it would acquire a majority stake in a Singapore private childhood education group.
The Beijing-based provider of early education said in a statement today that it planned to invest 125 million yuan ($18.5 million) for 70 percent equity interest in an unnamed entity.
RYB said the move was part of its expansion and diversification strategy, and that it also intended to change its name to "GEH Education" to "better reflect its growing platform of multiple brands, products and services in multiple markets and geographies." It did not explain the abbreviation in the new name and said it had yet to be approved by its shareholders at the company's general meeting.
"This acquisition expands our brands and service offerings to a wider audience and additional jurisdictions," RYB's co-founder, director, and chief executive officer, Yanlai Shi, said. "Moreover, the international English and bilingual curriculum, along with the high-quality education management team we are acquiring, will generate great synergy with our China-based operations and enhance our competitive edge in our core China early childhood education market."
Shi added, "This annoucement, together with our prior acquisitions and alliances, exemplifies our strategic and measured diversification across multiple business lines, products and geographies. It broadens our educational platform while allowing us to remain primarily focused on providing educational services to children from infancy to 6 years old."
The company has yet to recover on Wall Street from its plunge of 50 percent after it was trading above $16 per share in mid-November. The drop resulted from a government initiative to "prioritize affordable schooling," which included banning "all private kindergartens from selling shares to the public either by themselves or as part of asset packages," according to a statement by the State Council.