Alkhaleej Training signs MoU with GFH to merge education assets, establish new entity

Logo of Alkhaleej Training and Education Co.

Alkhaleej Training and Education Co. signed a non-binding memorandum of understanding with GFH Financial Group to explore ways of mutual cooperation for integrating the assets and companies of both parties in the education sector.

The two parties agreed to study the merger of the Alkhaleej Training's basic education assets and companies with GFH's education assets, through a 100% in-kind share exchange.

The assets targeted by the first party include 13 schools in Riyadh, Dammam, Jeddah, Khobar, Dhahran and Al-Ahsa, while the assets of the second party include 10 schools and a university in Saudi Arabia, Bahrain, the UAE, and Tunisia.

The number of students in the schools subject to the merger may reach approximately 25,000 male and female students, making this new entity one of the largest educational entities in Saudi Arabia.

This merger aims to establish a new entity (a Saudi joint-stock company or an educational fund) with the purpose of listing on the Saudi Exchange (Tadawul) within a period of 24 to 36 months from the completion of the deal. This is pending the necessary approvals from the Capital Market Authority and relevant authorities.

This memorandum shall take effect from the date of its signing by both parties and shall remain in effect for six calendar months. It may be extended for a similar period or periods with the written consent of both parties, and the extension agreement shall be attached to this memorandum and considered part of it.

Under major terms, the memorandum is not legally binding with respect to the execution of the transaction, but it is binding with respect to confidentiality during its period of validity.

Ownership percentages in the new entity will be determined based on the final agreed-upon valuation using multiple valuation methods and after the completion of due diligence.

Procedures the company will take during the term of the agreement include carrying out financial and legal due diligence evaluations and examinations, as well as appointing independent legal, tax, and certified financial advisors, as well as a certified appraiser in conjunction with the other party. This is in addition to completing the necessary studies, negotiations, and approvals for signing the final transaction agreements.

The MoU does not have a financial impact, the statement said, adding that there are no related parties.