BEIJING, Sept. 21,
2023 /PRNewswire/ -- Gravitas Education Holdings Inc.
(the "Company") (NYSE: GEHI), a leading early childhood education
service provider in China, today
announced that the Company's board of directors (the "Board")
approved a special cash dividend in an amount ranging from
US$11.256 to US$12.17 per American Depositary Share ("ADS"),
or from US$0.5628 to US$0.6085 per ordinary share. The aggregate
amount of cash dividends to be paid ranges from US$16 million to US$17.3
million, which will be funded by cash on the Company's
balance sheet. The payment of the special dividend is conditional
upon the Closing (as defined below), and the exact amount of such
special dividend is to be determined and separately announced.
Following payment of the special dividend and after the previously
announced divestiture of GEHI's PRC education business, the net
cash of the Company (excluding the aggregate amount of such special
dividend, but including the consideration received for the PRC
education business divestiture) will be no less than US$15 million at the Closing (as defined
below).
The Company previously announced that it entered into an
agreement and plan of merger (the "Merger Agreement"), dated
April 18, 2023, with Bright
Sunlight Limited, a Cayman Islands exempted company and a
direct, wholly owned subsidiary of the Company (the "Merger Sub"),
Best Assistant Education Online Limited, a Cayman
Islands exempted company ("Best Assistant") and a controlled
subsidiary of NetDragon Websoft Holdings Limited (HKEX: 0777,
"NetDragon"), a Cayman Islands exempted company, and
solely for purposes of certain named sections thereof, NetDragon.
It is contemplated that Best Assistant will transfer the education
business of NetDragon outside of the PRC to Elmtree Inc., a
Cayman Islands exempted company
limited by shares wholly owned by Best Assistant ("eLMTree").
Pursuant to the Merger Agreement, Merger Sub will merge with and
into eLMTree with eLMTree continuing as the surviving company and
becoming a wholly owned subsidiary of the Company (the "Merger").
The overview of the transaction is described in more details in
Annex A.
Immediately following closing of the Merger (the "Closing"), the
Company will change its name to "Mynd.ai, Inc." and operate in the
global market of interactive classroom technology with its
headquarter in Seattle,
Washington. The share ownership of the Company immediately
after the Closing is illustrated in Annex B.
The cash dividend will be paid by the Company on or before the
21st day after the date of the Closing to shareholders
of record at the close of business on the date immediately prior
the Closing date (the "Record Date"). ADSs will trade with an
entitlement to the cash dividend until the ex-dividend date is
established by the New York Stock Exchange ("NYSE"). In order to
retain the right to the cash dividend, ADS holders of the Company
need to hold the ADSs until the ex-dividend date, which shall be
the first business day after the Closing.
As conditions to Closing, among other things, approval by the
NYSE of the listing application submitted by the Company shall be
obtained and Completion of CFIUS Process (as defined under the
Merger Agreement) shall have occurred. The Company is actively
working with the NYSE in connection with its listing application.
Similarly, the Company and NetDragon are working with CFIUS to
obtain approval for the Merger as soon as practicable.
In light of the above updates related to the Merger, once the
Closing date is fixed, the Company will issue a separate press
release announcing the final amount of special cash dividend to be
paid by the Company and the Record Date for purpose of the dividend
payment. The said press release will be issued at least 10 days
prior to the Record Date in compliance with applicable listing
rules.
About Gravitas Education Holdings, Inc.
Founded on the core values of "Care" and "Responsibility,"
"Inspire" and "Innovate," Gravitas Education Holdings, Inc.
(formerly known as RYB Education, Inc.) is a leading early
childhood education service provider in China. Since opening
its first play-and-learn center in 1998, the Company has grown and
flourished with the mission to provide high-quality, individualized
and age-appropriate care and education to nurture and inspire each
child for his or her betterment in life. During its two
decades of operating history, the Company has built itself into a
well-recognized education brand and helped bring about many new
educational practices in China's
early childhood education industry. GEHI's comprehensive
early childhood education solutions meet the needs of children from
infancy to 6 years old through structured courses at kindergartens
and play-and-learn centers, as well as at-home educational products
and services.
Forward Looking Statements
This press release contains certain "forward-looking
statements." These statements are made under the "safe harbor"
provisions of the U.S. Private Securities Litigation Reform Act of
1995. Statements that are not historical facts, including
statements about the pending transactions described herein, and the
parties' perspectives and expectations, are forward-looking
statements. Such statements include, but are not limited to,
statements regarding the Merger, including the equity values, the
benefits of the Merger, expected revenue opportunities, anticipated
future financial and operating performance and results, including
estimates for growth, the expected management and governance of the
combined company, and the expected timing of the transactions. The
words "will," "expect," "believe," "estimate," "intend," "plan" and
similar expressions indicate forward-looking statements.
Such forward-looking statements are inherently uncertain, and
shareholders and other potential investors must recognize that
actual results may differ materially from the expectations as a
result of a variety of factors. Such forward-looking statements are
based upon management's current expectations and include known and
unknown risks, uncertainties and other factors, many of which are
hard to predict or control, that may cause the actual results,
performance, or plans to differ materially from any future results,
performance or plans expressed or implied by such forward-looking
statements. Such risks and uncertainties include, but are not
limited to: (i) risks related to the expected timing and likelihood
of completion of the Merger, including the risk that the
transaction may not close due to one or more closing conditions to
the transaction not being satisfied or waived, such as regulatory
approvals not being obtained, on a timely basis or otherwise, or
that a governmental entity prohibited, delayed or refused to grant
approval for the consummation of the transaction or required
certain conditions, limitations or restrictions in connection with
such approvals; (ii) the occurrence of any event, change or other
circumstances that could give rise to the termination of the
applicable transaction agreements; (iii) the risk that there may be
a material adverse change with respect to the financial position,
performance, operations or prospects of the Company or eLMTree;
(iv) risks related to disruption of management time from ongoing
business operations due to the Merger; (v) the risk that any
announcements relating to the Merger could have adverse effects on
the market price of the Company's securities; (vi) the risk that
the Merger and its announcement could have an adverse effect on the
ability of eLMTree to retain customers and retain and hire key
personnel and maintain relationships with their suppliers and
customers and on their operating results and businesses generally;
(vii) any changes in the business or operating prospects of eLMTree
or its businesses; (viii) changes in applicable laws and
regulations; and (ix) risks relating to the combined company's
ability to enhance its services and products, execute its business
strategy, expand its customer base and maintain stable relationship
with its business partners. Furthermore, the equity value of
eLMTree and the Singapore (SG)
business of GEHI provided in Annex A was arrived at by the parties
for purposes of the Merger Agreement after arm's length
negotiations between the parties with reference to, among other
things: (a) the current business operations of the Spin-off
Business as defined in the Merger Agreement, and(b) the future
development plans of the Spin-off Business as defined in the Merger
Agreement. Equity value is the total value of the enterprise as
determined by the parties for the purposes of the Merger Agreement.
It is not a GAAP measure and instead represents the negotiations
valuation of the business based on current business operations and
expectations of future earning power of the business. The equity
value was not established through an independent valuation and is
not a representation on what the actual market capitalization of
Mynd.ai will be post-Closing.
A further list and description of risks and uncertainties can be
found in the proxy statement that will be filed with the SEC by the
Company in connection with the Merger, and other documents that the
parties may file with or furnish to the SEC, which you are
encouraged to read. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those indicated
or anticipated by such forward-looking statements. Accordingly, you
are cautioned not to place undue reliance on these forward-looking
statements. Forward-looking statements relate only to the date they
were made, and eLMTree, the Company and their subsidiaries and
affiliates undertake no obligation to update forward-looking
statements to reflect events or circumstances after the date they
were made except as required by law or applicable regulation.
CONTACT
Gravitas Education Holdings, Inc.
Investor Relations
E-mail: ir@geh.com.cn
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SOURCE Gravitas Education Holdings Inc.