Benzinga | Apr 30, 2021 08:01AM EDT

Tarena Int'l. Reports Deal To Go Private At $4/ADS In Cash

Tarena International, Inc. (NASDAQ:TEDU) ("Tarena" or the "Company"), a leading provider of professional education and K-12 education services in China, today announced that it has entered into an Agreement and Plan of Merger (the "Merger Agreement") with Kidedu Holdings Limited ("Parent") and Kidarena Merger Sub, a wholly owned subsidiary of Parent ("Merger Sub"). Pursuant to the Merger Agreement, Merger Sub will merge with and into the Company, with the Company continuing as the surviving company and becoming a wholly owned subsidiary of Parent (the "Merger"), in a transaction implying an equity value of the Company of approximately US$230.6 million.

Pursuant to the Merger Agreement, at the effective time of the Merger, each American depository share of the Company (each, an "ADS"), representing one Class A ordinary share of the Company (together with the Class B ordinary shares of the Company, the "Shares"), issued and outstanding immediately prior to the effective time of the Merger, together with the Shares represented by such ADSs, will be cancelled in exchange for the right to receive US$4.00 in cash per ADS without interest, and each Share issued and outstanding immediately prior to the effective time of the Merger, other than the Excluded Shares (as defined in the Merger Agreement), the Dissenting Shares (as defined in the Merger Agreement) and Shares represented by ADSs, will be cancelled and cease to exist, in exchange for the right to receive US$4.00 in cash per Share without interest.

The merger consideration represents a premium of approximately 27.4% to the closing price of the ADSs on December 7, 2020, the last trading day prior to the Company's announcement of its receipt of the preliminary non-binding "going-private" proposal from Mr. Shaoyun Han, and premiums of approximately 84.4% and 98.1% to the volume-weighted average trading price of the ADSs during the 60 trading days and 90 trading days, respectively, prior to and including December 7, 2020.

The merger consideration will be funded through cash contribution by Ascendent Capital Partners III, L.P. or its affiliates (the "Sponsor," together with Mr. Shaoyun Han, the "Buyer Group"). Parent has entered into an equity commitment letter, pursuant to which the Sponsor has agreed, subject to the terms and conditions thereof, to provide the financing amounts for the purpose of financing the merger consideration. Mr. Shaoyun Han and his affiliates, Talent Fortune Investment Limited (an affiliate of KKR, "KKR"), New Oriental Education & Technology Group Inc. ("New Oriental"), and Banyan Enterprises Limited and Banyan Enterprises A Limited (affiliates of Gaorong Capital, "Gaorong," together with Mr. Shaoyun Han and his affiliates, KKR and New Oriental, the "Rollover Shareholders") have agreed to roll over all Shares they beneficially own in the Company in connection with the Merger.

The Company's board of directors, acting upon the unanimous recommendation of a committee of independent directors established by the board of directors (the "Special Committee"), approved the Merger Agreement and the Merger, and resolved to recommend that the Company's shareholders vote to authorize and approve the Merger Agreement and the Merger. The Special Committee negotiated the terms of the Merger Agreement with the assistance of its financial and legal advisors.

The Merger is currently expected to close during the third quarter of 2021 and is subject to customary closing conditions, including the approval of the Merger Agreement by the affirmative vote of shareholders representing at least two-thirds of the voting power of the outstanding Shares present and voting in person or by proxy at a meeting of the Company's shareholders. The Rollover Shareholders have agreed to vote all Shares they beneficially own, which represent approximately 74.8% of the voting rights attached to the outstanding Shares as of April 30, 2021, in favor of the authorization and approval of the Merger Agreement and the Merger. If completed, the Merger will result in the Company becoming a privately held company and its ADSs will no longer be listed on the NASDAQ Global Select Market.

Duff & Phelps, LLC is serving as the financial advisor to the Special Committee. Gibson, Dunn & Crutcher LLP is serving as U.S. legal counsel to the Special Committee. Walkers (Hong Kong) is serving as Cayman Islands legal counsel to the Special Committee.

Skadden, Arps, Slate, Meagher & Flom LLP is serving as U.S. legal counsel to the Buyer Group. Morrison & Foerster LLP is serving as U.S. legal counsel to the Sponsor. Paul, Weiss, Rifkind, Wharton & Garrison LLP is serving as U.S. legal counsel to KKR. Allen & Overy LLP is serving as U.S. legal counsel to New Oriental. Cooley LLP is serving as U.S. legal counsel to Gaorong. Conyers Dill & Pearman is serving as Cayman Islands legal counsel to the Buyer Group. Appleby is serving as the Cayman Islands legal counsel to the Sponsor. Han Kun Law Offices is serving as the PRC legal counsel to the Buyer Group. Zhong Lun Law Firm is serving as the PRC legal counsel to the Sponsor.