Jannie Mouton’s Trust offers makes R7 billion bid for Curro Holdings, South Africa’s largest private education company

 A trust owned by Capitec co-founder and PSG Group founder Jannie Mouton has made an approximate R7bn cash and shares offer to acquire JSE-listed Curro Holdings, South Africa’s biggest private education company.

The early morning announcement on Wednesday saw the share price rocket 53.68% to R12.31, and the intention is to delist Curro and turn it into a non-profit organisation, a statement from Curro's board said.

The board said had received an offer letter from the Jannie Mouton Stigting (Trust), to acquire all of the issued Curro Shares by way of a scheme of arrangement. Curro’s market capitalisation at the close of trade Tuesday was R4.52bn.

The Trust already owns 3.36% of Curro. The offer from the Trust was R13 a share, of which 6.6% would comprise cash, 79% Capitec shares and 13.78% PSG Financial Services shares.

The offer price represents a 60% premium to the closing share price of R8.13 on August 25 and a premium of 53% to the 30-day volume weighted average share price of the company of R8.52 per share as at the same date.

The founder of the trust is Janie Mouton, a founder of Capitec, PSG Group and PSG Financial Services and who also played a role in establishing Curro. Mouton established the Trust in 2004 as a vehicle to invest money in education for the benefit of more people in South Africa.

Mouton donated a portion of his accumulated wealth to the Trust with the intention of creating a charitable foundation to uplift the people of South Africa.

The objectives of the Trust are focused primarily on the provision of bursaries and grants for study to learners and students in South Africa, community development and outreach, and the alleviation of poverty in South Africa.

The Trust had identified Curro as an “ideal vehicle" through which to achieve these objectives, given it is already a reputable business and has a strong and forward-thinking management team.

“Curro is a meaningful force for good and a lighthouse of academic excellence in South Africa.” The Curro group currently has about 85% black students.

The Trust's aim was to position Curro as an everlasting independent education institution that uses its funds to build more schools, expand facilities and its education offering, and to provide bursaries for study to augment the government's efforts to provide excellent education to the leaders of tomorrow.

“Management adopted an introspective approach to drive financial margins and returns higher rather than to expand Curro's network during the last few years in a period of anaemic economic growth. Given that Curro will become an NPC and PBO going forward, although it will continue to operate with efficiency and expansion, Curro's growth will be accelerated through reinvestment of its potential returns/surplus to scale its offering faster and further.”

Meanwhile, Curro also Wednesday reported that its headline earnings per share and cash generation increased even though the average number of learners fell by 1.4% to 71,749 in the six months to June 30.

The financial results showed headline earnings per share up 0.2% to 40.3 cents, while cash generated from operating activities increased 10.3% to R688 million. Revenue increased 4.7% to R2.71 billion. Net debt reduced by R156m to R2.998bn. Earnings before interest tax depreciation and amortisation was unchanged at R625m. The balance sheet remained strong with R2.4bn of debt refinanced. Ancillary revenue increased strongly by 10.8% year-on-year.

“Curro’s ability to maintain its earnings and generate more cash despite lower learner numbers demonstrates its robust financial discipline,” said CEO Cobus Loubser. In South Africa's education sector, private schools are experiencing increased demand from parents seeking alternatives to public education, while economic pressures impact family budgets.

The total school fee revenue increased by 4.1%, reflecting the reduction in learner numbers which offset a portion of the annual school fee increases. “These results demonstrate the strength of our diversified education platform while delivering value to families across our school models. Our focus is on expanding quality education through excellence where every child matters,” said Loubser.

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