IBT acquires Psychology College for $13.1m

IBT Education Limited today announced the acquisition of the Australian College of Applied Psychology Pty Ltd for $13.1 million, subject to working capital and other adjustments.

ACAP is a provider of vocational programs and higher education qualifications in psychology, counselling and people management and leadership. Established in 1983, it currently operates from campuses in Sydney, Brisbane and Melbourne.

The acquisition price represents a multiple of approximately six and a half times ACAP's forecast EBITDA for the year ending 30 June 2007.

IBT expects the acquisition to be earnings accretive in year one and will fund the acquisition from its existing cash reserves.

Chief Executive Officer Rod Jones said the acquisition of ACAP was consistent with IBT's strategy of pursuing acquisitions within the global education sector where there is an opportunity to create value by leveraging the group's core competencies.

"ACAP provides us with an excellent opportunity to further expand our presence in the growing vocational education and training market and vocationally oriented niche areas of higher education. The value and strategic rationale for this acquisition are compelling," he said.

"As part of the IBT group and with access to our financial resources and international marketing expertise, ACAP will be in a very strong position to capture its full growth potential."

"In addition to continuing to build its business in its existing markets, we expect ACAP to achieve additional growth as a result of its Melbourne operations becoming eligible to offer FEE-HELP to students."

"We also expect ACAP to expand into the Adelaide, Perth and international markets in the future as well as expand its course offerings and market to international students."

"As we have demonstrated with the strong performance in the last financial year by recent acquisitions ACL and CSM Knowledge, IBT has the discipline and ability to integrate strategic acquisitions into the group to create value for shareholders."

ACAP Founding Director Lionel Davis said he was pleased that ACAP was joining a respected education service provider like IBT.

"Building ACAP has been my passion for many years and I believe it is best placed to continue to grow and prosper within the IBT group," he said.

"I will continue working with ACAP as a consultant in the future and I very much look forward to working with Rod and the IBT senior management team."

The ACAP acquisition is subject to conditions precedent customary for transactions of this nature and is expected to be completed on or about 31 August 2006.