China East Education Seeks Up to US$680m in Hong Kong IPO

[HONG KONG] China East Education Holdings Ltd., a provider of vocational training, started taking investor orders Monday for a Hong Kong initial public offering that could raise as much as $680 million.

The Hefei, Anhui-based company is offering 435.8 million shares at HK$9.80 to HK$12.26 (S$1.72 to $2.15)apiece, according to terms for the deal obtained by Bloomberg. The price range implies a market capitalization of US$2.7 billion to US$3.4 billion, the terms show.

At US$544 million, assuming bottom-end pricing, East Education's share sale would be the largest education listing globally, trumping the US$490 million offering by US education service provider Laureate Education Inc. in 2017, according to data compiled by Bloomberg.

The price range values East Education at 19.4 times to 24.3 times the company's estimated 2019 earnings, people with knowledge of the matter have said. Those figures assumed a so-called over-allotment option isn't exercised, the people said.

Anatole Investment Management agreed to invest US$35 million in East Education's IPO as a cornerstone investor, the terms show. The company aims to price the offering June 4 before starting trading June 12.

East Education runs vocational schools specialized in culinary, information technology and auto services, according to a preliminary prospectus filed to the Hong Kong stock exchange. BNP Paribas SA is sole sponsor for the offering, the prospectus shows.

BLOOMBERG