MindChamps Preschool CNE has entered into a joint venture (JV) with US MF25, and will use the group's wholly-owned subsidiary, MindChamps International Preschool Franchising, as the master franchisee for the US.
MindChamps International Preschool Franchising was incorporated on July 21, 2022 under the laws of Delaware, US.
The JV company will issue 3,450 additional shares at US$1,000 each and allot 1,750 ordinary shares at US$1,000 ($1,328.91) each to the JV partner, US MF25; and 1,700 ordinary shares at US$1,000 each to MindChamps International Preschool.
The JV company will become a 50-50 JV between MindChamps International Preschool and US MF25.
The total consideration to be paid by US MF25 is US$1,750,000. MindChamps International Preschool will subscribe for additional 1,700 shares of the JV company at US$1,000 each. In total, the JV company will have a paid-up capital of US$3.5 million.
As the master franchisee for the US, the JV company will purchase the first batch of 50 licences from MindChamps at US$70,000 each for a total of US$3.5 million.
See also: MindChamps banks on asset-light strategy, after-school care and online learning to accelerate growth
“The JV partner is owned by a group of existing franchisees of the company and/or its related entities who have supported the company’s expansion in Singapore,” reads a March 30 press release. “They are experienced MindChamps franchisees who share the same vision on the opportunities of the United States preschool market. The synergy and alignment of interests of the JV partner are beneficial to the company in the long run as the company kickstarts its United States expansion.”
The joint venture is not expected to have any material impact on the net tangible asset or earnings per share of the group for the financial year ending Dec 31, 2023.
Shares in MindChamps closed 0.1 cents higher, or 0.63% up, at 16 cents on March 30.
