TORONTO, June 28, 2016 /CNW/ - BrightPath Early Learning
Inc. ("BrightPath" or the "Company") (TSX-V: BPE), the leading Canadian provider of high-quality, comprehensive early childhood
education and care, announced today it has entered into a definitive agreement to acquire a portfolio of 20 early learning and
child care centres in the Greater Toronto Area from the owners of Peekaboo Child Care Centre Inc.
and subsidiary companies (collectively "Peekaboo").
Under the terms of the agreement, BrightPath will pay approximately $22 million, subject to
adjustments, for approximately 2,500 licensed spaces in 20 early learning and child care centres located in the Regions of Peel and
Halton, large and rapidly growing communities in the Greater Toronto Area. The addition of this
capacity will increase the size of BrightPath's portfolio by 41%.
The transaction is expected to close in the third quarter of this year and is, at present, subject to customary closing
conditions and conditions regarding child care licensing.
This acquisition enables BrightPath to leverage its investment in processes, technology and people to further increase earnings
and cash flow. Furthermore, the combined operations will have a significantly larger platform with the scope, scale and operating
leverage needed to strategically expand in a growing market.
"We have increasingly held the view that now is an ideal time for expansion into the Ontario
child care market and this acquisition is an excellent means to further that initiative. The Peekaboo centres have an excellent
reputation in the market place due to the quality and commitment of their people and we look forward to working with this strong
and capable team," noted Mary Ann Curran, Chief Executive Officer of BrightPath. "This is a
transformative transaction for BrightPath as it adds a large, highly profitable and complementary quality child care portfolio in a
growing market with in-place operations. The transaction will add significant cash flow to BrightPath, requires minimal incremental
general and administrative corporate overhead and provides the opportunity to capture a meaningful growth opportunity utilizing
in-place people, intellectual property and systems."
"Peekaboo was founded to meet a need for quality child care that was unmet in the market 18 years ago. Since then, we have grown
as that demand has also grown," says Lee-Anne Arkell, founder and President of Peekaboo. "The
centres are my life's work and a source of great pride, and I am pleased that my legacy will continue as part of the BrightPath
organization. The leaders of BrightPath share my passion and commitment to quality early learning and care and for improving the
lives of Ontario children and families. I look forward to working in partnership with the
BrightPath team to further enhance the quality of care and to continue to grow across Ontario."
This acquisition significantly increases BrightPath's presence in the Ontario market, from 14
centres to 34, which will result in a geographic capacity distribution of 46% in Ontario, 45% in
Alberta and 9% in British Columbia (as compared to the current
distribution of 23%, 64% and 13%, respectively).
The business being acquired also holds franchise agreements with 11 affiliate centres, presenting an additional revenue stream
and growth opportunity.
Dale Kearns, BrightPath's President and Chief Financial Officer added that, "This transaction is
fully financed through our bank credit facility. The credit facility's authorized limit will increase from $42 million to $62.5 million on the strength of underlying cash flows and the value
of our real estate. Importantly, while the acquisition of the Peekaboo centres provides significant additional cash flow, it
involves no equity dilution for shareholders and hence, will be significantly accretive."
Following the completion of the transaction, the Company will continue to have available financial resources to complete its
current pipeline of growth activities without equity dilution.
The Company intends to announce further details regarding this transaction upon closing, which is presently anticipated to occur
in the third quarter of 2016.
ABOUT BRIGHTPATH EARLY LEARNING INC.
BrightPath Early Learning Inc. is a Canadian leader in child care and early education with 55 locations in major markets across
the country. Meeting the highest standards in curriculum, nutrition, technology and recreational programming, BrightPath is
committed to providing families with the very best child development and care Canada has to
offer.
For more information, visit www.BrightPathKids.com/corporate (TSX‐V: BPE). For further information regarding this release, please contact
Dale Kearns, President and Chief Financial Officer of BrightPath Early Learning Inc. at (403)
705-0362 ext. 406.
FORWARD-LOOKING STATEMENTS
Certain statements contained herein constitute forward-looking statements regarding the future growth, results of operations,
performance and opportunities of the Company. Forward-looking statements can generally be identified by the use of, but not limited
to, the following words: "plans", "expects" or "does not expect", "budget", "scheduled", "estimate", "forecast", "pro forma",
"anticipate" or "does not anticipate", "believe", "intend", "inferred", "potential" and similar expressions or statements that
certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking
statements are not historical facts, but reflect the Company's current expectations regarding future results or events based on
information currently available and what the Company believes to be reasonable assumptions. All forward-looking statements are
qualified by these cautionary statements.
Forward-looking statements are subject to a number of risks, assumptions and uncertainties that could cause actual results,
performance or events to differ materially from those expressed or implied by such forward-looking statements. Factors that could
cause actual results or events to differ materially from those expressed, implied or projected include, but are not limited to,
general economic conditions, the Company's ability to meet and maintain forecasted occupancy levels, general government policies,
continued availability of government child care subsidies to parents, unexpected costs or liabilities related to acquisitions,
construction, environmental matters, legal matters, changes in interest rates, credit spreads and the availability of financing. In
addition, please refer to the Risks and Uncertainties section of the Company's annual Management's Discussion and Analysis. As
such, the Company gives no assurance that actual results will be consistent with these forward-looking statements.
Readers should not place undue reliance on any such forward-looking statements. These forward-looking statements are made as of
the date hereof. The Company undertakes no obligation to publicly update or revise any such statement, reflect new information or
reflect the occurrence of future events or circumstances, except as required by securities laws.
SOURCE BrightPath Early Learning Inc.
