CALGARY, July 29, 2015 /CNW/ - BrightPath Early
Learning Inc. ("BrightPath" or the "Company") (TSX-V: BPE), the
leading Canadian provider of quality early childhood education and
care, announced today it has entered into conditional agreements
with an affiliate of First Capital Realty Inc. ("First Capital") to
sell and leaseback its premier McKenzie Towne location in southeast
Calgary. Situated on land pursuant
to a long term ground lease, this state-of-the-art building,
designed and built by BrightPath, will be sold for gross proceeds
of $7.5 million. In conjunction with
the sale and surrender of the ground lease, the Company will enter
into a long-term lease for this property with First Capital,
thereby providing BrightPath with a long term presence in the
growing McKenzie Towne community.
The transaction is being effected at a capitalization rate of
6.76% which, the Company believes, is very attractive pricing for a
real estate land lease transaction of this nature and, more
importantly, recognizes the inherent strength of BrightPath's
operating and financial covenant as a tenant. The transaction is
anticipated to close in the third quarter of 2015.
This transaction should, after all attendant expenses, create
the availability of approximately $7.3
million of incremental capital to redeploy to generate cash
flow from new capital initiatives and surface shareholder value.
Such initiatives include the augmentation of its currently
available funding for the Company's growth pipeline and the
purchase of the Company's common shares which both management and
the board of directors deem to be significantly undervalued at
their current market price. These anticipated uses of proceeds
should serve to further increase the Company's profitability both
in absolute terms and on an accretive basis.
The Company expects to report a gain on disposition of
approximately $1.8 million from the
sale. After the repayment of indebtedness under the Company's
credit facility and associated transaction costs, the sale will
generate estimated net cash proceeds to the Company of $3.25 million. BrightPath can then avail itself
of the $4 million of bank financing
repaid thereby creating $7.3 million
of available capital as noted previously.
"This transaction validates the significant market value of
BrightPath's large portfolio of owned real estate, and the value
created by the Company's greenfield developments. Neither one of
these assets is believed to be fairly valued in the Company's
current share price. It is noteworthy that the Company owns 24
properties and one single property transaction is surfacing
$7.3 million of capital. Real estate
monetization represents just one of several initiatives management
is exploring to surface value for its shareholders," said
Mary Ann Curran, Chief Executive
Officer of BrightPath.
Following the sale and leaseback of the McKenzie Towne property,
the Company will own 23 centres totalling approximately 160,000
square feet, including its nearly identical Chestermere greenfield location which was
developed and opened just months before McKenzie Towne. The
Chestermere location is sited on
land owned by the Company (as compared to McKenzie Towne which was
developed on leased lands). The Company has also announced and is
in the process of constructing two 20,500 square feet greenfield
developments in Alberta --
Creekside and West Henday -- modelled after the successful McKenzie
Towne project; they are expected to open in the third quarter of
2015 and first quarter of 2016, respectively.
About BrightPath Early Learning Inc.
BrightPath Early Learning Inc. is a Canadian leader in child
care and early education with 52 locations in major markets across
the country. Meeting the highest standards in curriculum,
nutrition, technology and recreational programing, BrightPath is
committed to providing families with the very best child
development programs and care Canada has to offer.
For more information, please visit
www.BrightPathKids.com/corporate or contact Dale Kearns, President and CFO of BrightPath
Early Learning Inc. at (403) 705-0362 Ext. 406.
Forward-Looking Statements
Certain statements contained herein constitute forward-looking
statements regarding the future growth, results of operations,
performance and opportunities of the Company. Forward-looking
statements can generally be identified by the use of, but not
limited to, the following words: "plans", "expects" or "does not
expect", "budget", "scheduled", "estimate", "forecast", "pro
forma", "anticipate" or "does not anticipate", "believe", "intend",
"inferred", "potential" and similar expressions or statements that
certain actions, events or results "may", "could", "would", "might"
or "will" be taken, occur or be achieved. Forward-looking
statements are not historical facts, but reflect the Company's
current expectations regarding future results or events based on
information currently available and what the Company believes to be
reasonable assumptions. All forward-looking statements are
qualified by these cautionary statements.
Forward-looking statements are subject to a number of risks,
assumptions and uncertainties that could cause actual results,
performance or events to differ materially from those expressed or
implied by such forward-looking statements. Factors that could
cause actual results or events to differ materially from those
expressed, implied or projected include, but are not limited to,
general economic conditions, the Company's ability to meet and
maintain forecasted occupancy levels, general government policies,
continued availability of government child care subsidies to
parents, unexpected costs or liabilities related to acquisitions,
construction, environmental matters, legal matters, changes in
interest rates, credit spreads and the availability of financing.
In addition, please refer to the Risks and Uncertainties section of
the Company's annual Management's Discussion and Analysis. As such,
the Company gives no assurance that actual results will be
consistent with these forward-looking statements.
Readers should not place undue reliance on any such
forward-looking statements. These forward-looking statements are
made as of the date hereof. The Company undertakes no obligation to
publicly update or revise any such statement, reflect new
information or reflect the occurrence of future events or
circumstances, except as required by securities laws.
SOURCE BrightPath Early Learning Inc.