Janison (ASX:JAN) signs deal to acquire school assessments business, QATs

Highlights

  • Janison has agreed to pay AU$2 million in total consideration in an agreement involving the acquisition of a school assessments business – Quality Assessment Tasks (QATs).
  • QATs is an Australian market leader in the development of school assessments for Year 11 and 12 subjects.

Australian Company, which provides internet-based educational services, Janison Education Group Limited (ASX:JAN) shared via an announcement that the Company has entered into an agreement to acquire a school assessments business – Quality Assessment Tasks (QATs). The Company revealed that the deal is likely to get completed on or around 15 October 2021. 

According to today's announcement, this agreement entails: 

  • Acquisition of a suite of highly valued and well-established school assessments
  • Access to an item bank of ~5,000 digital test items
  • Access to a large pool of 250+ test developers and reviewers
  • Consistent revenue, cash flow positive, earnings accretive deal
  • Cross-sell opportunity of school assessments
  • Increases market share in Australia

Headquartered in Victoria, Quality Assessment Tasks is an Australian market leader in developing school assessments for Year 11 and 12 subjects. Operating for over 20 years, QATs has developed a well-known and reputable brand in the market.

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The announcement stated that Janison has agreed to pay AU$2 million in total consideration, of which AU$1.25 million will be paid in cash upfront upon completion. The remaining AU$0.75 million variable earnout payment will be made in cash which will be deferred for one year and contingent upon achieving an agreed FY22 revenue target. Besides, the total consideration will be funded from Janison's cash balance and represents a recurring revenue multiple of 1.5x. 

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It is to be noted that QATs has nearly a 50% national market share of the roughly 2,800 secondary schools across Australia with an 80% share in NSW, 90% in Victoria and 40% in QLD & SA, the latter being relatively newer markets. In FY20, the Company reported Customer retention at 73%.  

The stock JAN was spotted trading at AU$0.960 per share on ASX at 12:09 PM AEDT. 

Bottom Line:

The acquisition of QATs increases Janison's share of the Australian school market and broadens Janison's product portfolio by bringing on a suite of highly regarded and well-known assessments under a reputable brand name with a long history. 

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