June 15, 2018 / 4:01 PM / 3 months ago

Brazilian group Positivo plans 2019 IPO of education unit

SAO PAULO, June 15 (Reuters) - Brazilian group Positivo is planning an initial public offering (IPO) of its education unit as early as January next year, a senior executive told Reuters.

The company has not yet hired banks to manage the offering of its education unit Positivo Participações, Lucas Guimarães, vice president at Grupo Positivo, said, but has seen increased investor interest in school operators.

Positivo will try to avoid a listing in the second half of this year, as Guimarães expects “too much volatility” due to an unpredictable October presidential election.

The education unit would be the second listed company within the Brazilian group, which is the controlling shareholder of technology company Positivo Tecnologia SA.

Guimaraes declined to elaborate on a potential valuation for Postivo’s education unit, which last year booked net income of 117 million reais on 1.2 billion reais in revenue.

The education unit has seven private K-12 schools in the southern states of Parana and Santa Catarina, with around 8,000 students enrolled. Its university, with eight campuses in the state of Parana, has 40,000 students. Its learning systems are used by 867,000 students.

Guimarães said the group has seen increased interest from investors in early education as for-profit college operators struggle with cuts in government-funded student loans.

In April, Brazil’s largest for-profit college operator, Kroton Educacional SA, agreed to pay 6.3 billion reais ($1.7 billion) for Somos Educação SA, Brazil’s the only listed company focused on elementary and high school education. At the time of the offering, Kroton offered a 66 percent premium over the price of Somos shares. ($1 = 3.81 reais) (Additional reporting by Carolina Mandl Editing by Jeffrey Benkoe)

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