- G8 Education is set to sell 25 of its centres in Western Australia to Sparrow Early Learning
- The centres will be sold for $6.4 million, with funds raised allocated to repay debt
- The deal is expected to be finalised in December
- G8 is down 18.92 per cent on the Australian Securities Exchange and is trading at $2.10 per share
G8 Education has agreed to sell 25 of its centres in Western Australia to Sparrow Early Learning for $6.4 million.
Sparrow is an early childhood education company with 34 childcare centres in Queensland and Victoria.
The centres will be sold for $6.4 million, with funds allocated to repay debt. G8 says this divestment is not expected to have any material impact on the company’s statutory results.
The deal is expected to be finalised in December and is subject to standard conditions for a transaction of this nature, which includes landlord consent and service approval.
G8 said it is expecting an overall portfolio uplift of more than one per cent, along with a more than 10 per cent occupancy rise for its West Australian business.
The company expects capital expenditure savings to result from the deal with an annual cost reduction of $330,000.
G8 CEO Gary Carroll says the sale of these centres is consistent with the company’s strategy.
“The divestment will enable G8 to increase its focus on the execution of our strategic program and the existing Greenfield pipeline,” Gary said.
“We will work with Sparrow Early Learning to ensure there is a smooth transition for families, children and team members,” he added.
G8 Education is a childcare operator with multiple facilities in Australia and Singapore.
The company is down 18.92 per cent on the Australian Securities Exchange and is trading at $2.10 per share at 1:06 pm AEDT.