Listed conglomerate Phinma Corp. has acquired additional shares from existing shareholders of Southwestern University (SWU) to strengthen its position in Cebu’s education industry.
The company told the Philippine Stock Exchange (PSE) that it fully paid P367.8 million for 3,214 shares on Aug. 4, increasing its controlling stake in the university by an additional 10.62 percent.
The acquisition was funded by a loan of P368 million.
Phinma initially acquired last May 56.83 percent, or 17,201 shares, of the school’s total outstanding capital stock for P1.9 billion from the Aznar family.
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In a statement, the company said the acquisition will increase enrollment in Phinma Education’s schools by 10,000 students to 47,000 students. It will consequently increase Phinma Education revenues and bottom line.
“The Cebu location likewise gives Phinma presence in one of the country’s major education centers, expanding its physical reach and influence. This investment also represents Phinma’s entry into the mid-income education market,” the company said in a report to the PSE.
With Phinma’s takeover, SWU’s future is ensured as it transforms from a family-run company into a professionally-run institution, the company added.
The conglomerate is set to spin off its education business into an independent subsidiary in preparation for further expansion and a potential stock market debut by 2017 onwards.
Phinma has earmarked P2 billion for a holding company for the education business. The amount will allow the new subsidiary to purchase from its parent firm the first four universities under the group.
These are University of Pangasinan, Araullo University, Cagayan de Oro College, and University of Iloilo. SWU will be folded into this unit later this year and at a separate valuation.
The education unit of Phinma is expected to generate about P1.6 billion in revenue this fiscal year ending March 2016, after breaching the P1-billion mark last year.
Last fiscal year’s revenue breached P1 billion with the first four schools in the network.
SWU is seen to contribute P400 million to P500 million in the current fiscal year.