Imagine Education – childcare centres ownership restructure

WA-80019

The parties propose to undertake an ownership restructure between the existing part-owners of 35 childcare centres that form part of the Imagine Education group, have a common management team and operate under the Imagine Childcare, Children First and Grow Early Education brands (the **Acquisition**). The centres provide: * centre-based childcare and early childhood education services (long day-care) for children aged approximately 0–6 years; and * ancillary services associated with the operation of childcare centres (for example, meals and incidental educational programmes). The centres operate through 34 unit trusts (**Sub-Trusts**). The units in the Sub-Trusts are held by a number of private investment companies and trusts, with overlapping or common investors between different Sub-Trusts. Currently, Imagine Education Investments Trust (**Head Trust**) holds a proportion of the units in most of the Sub-Trusts and all of the units in Head Trust are owned by Waterworks Education Group Pty Ltd (**WEG**). The current trustee of Head Trust is Imagine Education Investments Pty Ltd. Prior to the Acquisition, Polar 993 Limited (**Head Trustee**) will be appointed as the new trustee of Head Trust. The Acquisition has two stages. In the first stage, 4 Sub-Trusts (**AH Sub-Trusts**) propose to acquire all of the units they do not already hold in 4 unit trusts through which 4 of the childcare centres are operated (**AH Sub-Sub-Trusts**). In exchange, the AH Sub-Trusts propose to issue the current holders of those units with new units in the AH Sub-Trusts. As a result, Head Trust would increase its unitholding in 2 AH Sub-Trusts. In the second stage, Head Trust proposes to acquire all of the units that it does not already hold in each of the Sub-Trusts from the current holders of those units (**Vendors**), in exchange for Head Trustee issuing the Vendors with new units in Head Trust. As a result, WEG’s interest in Head Trust would be diluted but it would acquire an interest in the units in the Sub-Trusts to be acquired by Head Trust. The proposed restructure will not change the value of the economic interests of each Vendor and WEG in the Sub-Trusts as a whole or the management or operational control of the centres.