Phinma takes control of Cebu's Southwestern University
April 23, 2015
Business World Online
By Krista Angela M. Montealegre
April 23, 2015
PHINMA Corp. has bolstered its portfolio of schools with the acquisition of a controlling stake in Southwestern University (SWU) in Cebu.
PHINMA told the stock exchange its board approved the purchase of 17,201 shares equivalent to 56.83% of SWU for P1.9 billion. The investment will be partly funded by a loan of up to P1.5 billion.
The purchase price took into account various factors such as the number of enrollees, brand value, and the appraised values of properties registered under the name of the school. The properties include the Sacred Heart Hospital and 240 hectares of land in Cebu.
The closing of the transaction is subject to the submission of required deliverables such as stock certificates and deed of sale of shares representing at least 50% interest in SWU.
Once the acquisition is completed, PHINMA will take charge of upgrading the facilities and laboratories, improving operational efficiencies, and marketing the school.
"PHINMA will also push SWU to move aggressively on the senior high school market, an opportunity arising from the Department of Education's K to 12 initiative," the holding firm said.
The acquisition of SWU, considered a "strong education brand" in the Visayas and Mindanao, is aimed at strengthening Phinma's position in the industry.
"With the addition of SWU, the enrollment of PHINMA Education's schools will grow by 10,000 students to 47,000 students and will consequently increase PHINMA Education's revenues and bottom line," PHINMA said.
"The Cebu location likewise gives PHINMA presence in one of the country's major education centers, expanding its physical reach and influence. The investment also represents PHINMA's entry into the mid-income education market," it added.
The group has four schools catering to the lower income segment. They are University of Iloilo, Araullo University, Cagayan de Oro College and University of Pangasinan.
The Philippine Stock Exchange suspended trading of the company's shares pending compliance with disclosure requirements. It closed at P11.50 on Wednesday.