Largest Investment In EduTech History Goes To betterU
Palisade Research November 3, 2017
betterU Education Corp. (CVE:BTRU, FRA:5OGA) Update
In the annals of equity financings on the Toronto Venture Exchange, betterU may have just set a record. After remaining halted for over a week, the company announced this morning a US$100 M equity investment.
Why is that so shocking? Well, the financing is being done at US$3.00 per unit, despite the stock trading at C$0.44! And, the market cap of the company is just C$22.8 M at its current share price. Market cap at indicated price of financing – more like C$220,000,000!
Here are the details…
This morning, betterU announced it has entered into a binding LOI with Treasure Union Limited, a private company based in Hong Kong, for an equity investment of US$100 M financing at US$3.00 per common share.
At current market rates, this is a 778% premium.
Until the money is in the bank account, skepticism will prevail. From our perspective, all indications are that this is a real deal. Negotiations for this investment have been ongoing for months. In fact, a board member of betterU made the introduction to the fund, which led to the investment.
Investors of the fund are ultra-high-net-worth Chinese investors, some of whom made their fortunes in technology. Their mandate is to invest in “high-growth public and private companies from North America involved in humanitarian sectors including education, healthcare, and information technology.”
Furthermore, the deal would not have proceeded without the blessing of the Varshney family, a serially successful clan from Vancouver. They would not stake their reputation on one deal.
The TSX Venture is doing their own due diligence. And betterU will receive validation from Treasure Union’s bank in the next week or two. This will confirm that the funds are ready to go.
When we first wrote-up betterU, we stated: “we believe Brad will be able to secure a significant investment in the next six months.” Today’s announcement is an affirmation of our investment thesis in technology: deploy capital into disruption and aggregation that is poised for rapid adoption.
Palisade Global Investments Limited holds shares of betterU Education Corp.. We receive either monetary or securities compensation for our services. We stand to benefit from any volume this write-up may generate. The information contained in such write-ups is not intended as individual investment advice and is not designed to meet your personal financial situation. Information contained in this report is obtained from sources we believe to be reliable, but its accuracy cannot be guaranteed. The opinions expressed in this report are those of Palisade Global Investments and are subject to change without notice. The information in this report may become outdated and there is no obligation to update any such information. Do your own due diligence.