SYDNEY: EDU Holdings Limited has entered into an agreement to acquire 100% of the shares in Care Plus Training Pty Ltd trading as Nurse Training Australia (NTA) for $6.0m in cash, representing an acquisition multiple of approximately 4.6x normalised CY21 EBITDA of $1.3m (6x normalised pre-AASB 16 EBITDA of $1.0m).
Nurse Training Australia (NTA) is a vocational education provider in Health & Community Services fields of study, including nursing. The business is primarily focussed on the international student market and delivers from two campuses in Burwood, Western Sydney.
Commenting on the acquisition, CEO, Adam Davis said: “We have been planning a strategic entry into nurse training for some time now and see the acquisition of NTA as a highly attractive opportunity to expand EDU’s offering. There is strong alignment between the businesses, both sharing a commitment to deliver high-quality training and employment outcomes.
NTA currently operates from Burwood, Western Sydney, presenting a clear path for growth through expanding the nursing offer nationally through EDU’s campus network. The agent networks are complementary, with little cross-over, broadening the reach of both businesses. The acquisition is also a catalyst for the Group to develop a higher education nursing program, in line with our strategy of creating pathways from vocational to higher education.”
NTA was founded in 2013 and is a privately-owned Registered Training Organisation (RTO) and Commonwealth Register of Institutions and Courses for Overseas Students (CRICOS) provider. It offers certificate and diploma level courses in Health & Community Services fields of study aligned to areas with skills shortages, including nursing. NTA currently operates from two campuses located in Burwood, Western Sydney.
The business primarily focuses on the international student market, with revenue from international students representing approximately 85% of calendar 2021 revenue. It has 239 international students currently studying across its two campuses, with approximately half of these students undertaking the Diploma of Nursing program. Graduates of the program can articulate into the University of Canberra’s Bachelor of Nursing program via a pathway agreement. NTA recruits students both onshore and offshore, with its top three source countries being Nepal, India and The Philippines.
NTA also services domestic students through a NSW Smart and Skilled government funding contract and a small fee-for-service offering. In calendar 2021, revenue from domestic students represented approximately 15% of NTA’s revenue. During calendar 2021, NTA generated revenue of $4.1m and EBITDA of $1.3m.
The acquisition of NTA expedites EDU’s strategic entry into the nurse training market and broadens its course offering within Health and Community Services.
EDU considers the nurse training market to be highly attractive, given the strong job prospects for graduates, relatively few competing providers focused on the international student market, and the opportunity to develop a higher education nursing program to extend the lifetime value of Group’s nursing students.
Nursing is on the Skilled Occupations List, presenting potential permanent residency opportunities for international students. NTA’s agent network and student nationality mix complement EDU’s, with opportunities to promote course offerings across the two groups. EDU sees a strong opportunity to expand NTA’s Diploma of Nursing program into EDU’s campus network across Australia. On a proforma CY21 basis, the acquisition adds 18% to EDU’s revenue and 65% to its EBITDA.
EDU will pay $4.5m upfront for 75% of the shares (Initial Payment) with a further $1.5m payable in 12 months for the remaining 25% (Deferred Payment).