STI on lookout for new school acquisitions

MANILA, Philippines - STI Education Systems Holdings Inc. (formerly JTH Davies), fresh from a successful follow-on offering of its shares, is on the lookout for school acquisitions to expand the company’s academic portfolio and help it reach a target of 100,000 students, executives said yesterday.

“We have been on the lookout for a long time, even before the follow-on offering. We have a number of schools in the pipeline,” said STI chairman Eusebio Tanco.

The planned acquisitions will allow STI to offer accounting, hotel and restaurant management, and tourism courses that are enjoying brisk demand, Tanco said.

The company currently has 85 schools nationwide, of which 55 are franchised and 30 company-owned. It has 67,361 students for STI alone and 72,000 for other affiliate schools including Philippine Women’s University (PWU) and iAcademy.

For its existing schools, Tanco said the company plans to merge liberal arts and technology.

Tanco said STI will buy additional schools if the economics show it is cheaper to acquire an established campus instead of building a new one.

STI formally listed yesterday 2.627 billion shares in the local bourse that it sold at 90 centavos each through a follow-on offering, which was more than twice oversubscribed.

Majority of the shares were sold to long-term investors, mostly Asian-based foreign investment houses.

“The strategy is to upgrade our wholly-owned schools. We are adding 41,000 students to the capacity of the nine schools we are upgrading,” said STI CEO Monico Jacob.

“With the upgrade, we aim to bring the number to more than 100,000 in the next three years,” Jacob said.

STI has alloted P1.528 billion in capital expenditures next year and P2.39 billion for 2014.

“There are no plans to raise more funds through equity capital for now,” said STI chief investment officer Martin Bautista.

Tanco said the company might tap the debt market to take advantage of low rates only when there is an acquisition opportunity.

Tanco has consolidated all his education assets — the STI chain of schools, a 40 percent stake in PWU and iAcademy – under STI.

Also injected is a 20 percent stake in STI Investments, which holds Tanco’s strategic investment in Philplans, a leading pre-need savings program with plans dedicated to education, and Philcare.