ATA Inc. ("ATA" or the "Company") (Nasdaq:ATAI), a
leading provider of advanced testing technologies and
testing-related services in China, today announced that the Company
has entered into a framework agreement for a strategic investment
in Beijing Biztour International Travel Service Co., Ltd. (“Beijing
Biztour”), a provider of international educational study tour and
travel services for students in China who are interested in
overseas study tours primarily in the U.S., United Kingdom, and
Australia.
ATA to Explore Potential Opportunities
in International EducationAs previously announced, the
Company has embarked on an effort to explore merger and acquisition
opportunities within the education sector in China. Driven by
increased demand for more diverse international education
opportunities by urban families in China, the international
educational travel market is particularly attractive as a growing
number of China-based students seek short- and long-term
international education opportunities. China remains the world’s
no. 1 source of international students and sends the largest number
of students overseas for study. According to the Ministry of
Education, 544,500 Chinese students pursued study abroad
opportunities in 2016, more than triple the 179,800 students who
sought overseas education in 2008.
Beijing Biztour – China’s Largest
Provider of B2B Educational Tour ServicesBeijing Biztour
specializes in providing comprehensive affordable, high-end
solutions for study tour products, which include overseas learning
and tour service provisions. Through its B2B distribution network,
Beijing Biztour serves more than 7,000 students each year and is
one of the largest educational tour service providers in China.
Beijing Biztour has an extensive global network of overseas
partners including 1,100 host families, 300 part-time team members
in the U.S. alone, and close relationships with many well-regarded
school districts and top universities including Harvard, Columbia,
Stanford and MIT. Beijing Biztour also partners with over 200
education camps focused on a variety of subjects and over 300
globally recognized companies. Beijing Biztour has over 15 product
categories including language, sport, art, math, robotics,
technology, leadership, and outdoor activities. Beijing Biztour has
over 30 study tour destinations in the world and over 300 study
tour products. Beijing Biztour has served students from all over
China.
ATA believes that Beijing Biztour has built a
solid foundation for its business’ long-term sustainable growth. By
leveraging the synergies between ATA’s and Beijing Biztour’s
respective products, operational capabilities, markets, resources
and competencies, ATA believes the management team of Beijing
Biztour will be in a better position to maintain its leadership
position within the industry and accelerate the growth of its
business.
Highlights of
the Strategic InvestmentUnder the
terms of the agreement, ATA will provide US$2.0 million in
convertible bonds, valid for one year at an 8% interest rate, to
Beijing Biztour in support of growing its operations. ATA will be
granted a six-month exclusive negotiation period with Beijing
Biztour during which ATA will conduct due diligence and determine
whether ATA will work toward a definitive acquisition agreement
with Beijing Biztour to acquire 100% of the shares of Beijing
Biztour. Should ATA move forward with the acquisition before the
convertible bonds mature, the US$2.0 million in convertible bonds
will be capitalized and converted into shares of Beijing Biztour.
If ATA does not move forward with the acquisition, Beijing Biztour
shall return the principal of US$2.0 million plus interest accrued
thereon upon maturity of the convertible bonds’ one-year term.
Management CommentaryMr. Jack
Huang, ATA’s president, stated, “We are pleased to have this
opportunity to work with one of China’s largest international study
tour service providers and look forward to working with the Beijing
Biztour team on growing the business and pursuing prospects for
expansion and diversification through our synergies. With its
extensive network of education and service partners in the U.S.,
Beijing Biztour is well positioned to take advantage of the growing
demand for study tours in China by leveraging its experience and
knowledge in curating unique and enriching experiences for the
Chinese students.”
Mr. Kevin Ma, ATA’s Chairman and CEO, stated,
“As we previously mentioned in our earnings conference call on
March 19, 2018, we plan to leverage our existing competency-focused
assessment and education service capabilities and the strategic
opportunities that we have been working on to transform our company
into a leading international education service provider. We have
been exploring the possibility of using the proceeds from the ATA
Online transaction to fund potential M&A opportunities within
the education sector. ATA’s collaboration with Beijing Biztour is
one of such opportunities, and we will also continue to explore and
validate other potential areas of expansion as the Company works
toward closing the ATA Online sale.”
About ATA Inc.ATA is a leading
provider of advanced testing technologies in China. The Company
offers comprehensive services for the creation and delivery of
assessments based on its proprietary testing technologies and test
delivery platform. ATA’s testing technologies are used for
professional licensure and certification tests in various
industries, including information technology services, banking,
teaching, asset management, insurance, and accounting. As of
December 31, 2017, ATA's test center network comprised 3,344
authorized test centers located throughout China. The Company
believes that it has the largest test center network of any
commercial testing service provider in China.
ATA has delivered approximately 100.7 million
billable tests since ATA started operations in 1999. For more
information, please visit ATA’s website at www.atai.net.cn.
Cautionary Note Regarding
Forward-looking StatementsThis announcement contains
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, and as defined in the
Private Securities Litigation Reform Act of 1995. These
forward-looking statements can be identified by terms such as
"believe," "could," "expect," "future," "look forward to," "plan,"
"should," "will," and similar terms. Examples of forward-looking
statements in this press release include statements about ATA’s
plan and efforts to transform itself into a leading international
education service provider; the benefits of and use of proceeds
from the sale of ATA Online; the expected use of the proceeds
invested by ATA in Beijing Biztour; ATA’s plans for mergers and
acquisitions generally; the anticipated benefits to ATA’s expansion
efforts into the international education studies market; and the
ability of ATA and Beijing Biztour to cooperate effectively and to
introduce offerings and build partnerships in China. These
forward-looking statements involve known and unknown risks and
uncertainties, are based on current expectations, assumptions,
estimates, and projections by both ATA and Beijing Biztour, and are
subject to governmental approvals and other conditions. The Company
undertakes no obligation to update forward-looking statements,
except as may be required by law. The Company cannot assure you
that its expectations and assumptions will turn out to be correct,
and investors are cautioned that actual results may differ
materially from the anticipated results.
For more information on our company, please contact the
following individuals:
At the CompanyATA Inc.Amy Tung, Chief Financial
Officer+86 10 6518 1122 x5518amytung@atai.net.cn
Investor Relations The Equity Group Inc.Carolyne Y. Sohn, Senior
Associate415-568-2255csohn@equityny.com
Katherine Yao, Senior Associate+86 10 6587
6435kyao@equityny.com
Adam Prior, Senior Vice
President212-836-9606aprior@equityny.com
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