Benzinga | Oct 18, 2021 09:13AM EDT

Elite Education Group International Ltd. Enters Letter Of Intent With Ameri-Can Education Group Corp For Career-Training Education Pursuant To Which Co. Would Acquire 70% Of Ameri-Can At $2.5M If Acquisition Is Successful

Elite Education Group International Limited (Nasdaq: EEIQ) (hereinafter referred to as the "Company"), a provider of comprehensive, one-stop education solutions for Chinese university students interested in study abroad programs in the US and other countries, today announced that as part of its long-term growth plans, it has launched a strategic growth initiative consistent with its goal to become a leading education company. Therefore, the Company has entered into a non-binding letter of intent ("LOI") with in Ameri-Can Education Group Corp. ("Ameri-Can"), an Ohio Corporation that focuses on career-training education.

The Company seeks to expand its educational services business model with educational enterprises that are complementary to and synergistic with its business model. The Company is intent upon highly focused educational targets that expands its capabilities with the appropriate size, geographical reach and student population where the Company can add substantial value and expand its education service market. Pursuant to the LOI, if the acquisition is successful, the Company would acquire 70% of Ameri-Can, with 77.78% of voting rights, at an acquisition price of $2.5 million, with 50% of the payment to be made in cash and 50% in EEIQ common shares at a price of $6.20, with an additional cash investment of $2.5 million to be made in Ameri-Can immediately following the closing of the transaction.

"We are excited to announce this potential acquisition as it would represent a major expansion of our business. We believe that career-training education offers immediate synergies with our existing operations as well as significant long-term growth opportunities. We view this as an important strategic initiative in expanding our business model with a new educational direction and to implement innovative new education programs. If completed, the acquisition will enable us to better serve our student constituency since it will enable us to offer students from China and other Asian countries who wish to study abroad with a broader set of academic and career-training options that more precisely match their interests and career objectives," commented Jianbo Zhang, Chairman and Chief Executive Officer.

The Company views this potential acquisition as an ideal fit and complementary to its current business model. The Company believes that its entry into the US career-oriented community college field will help it to recruit international students from China as well as to help the Company enter the southeast Asian market. It is also consistent with the recent announcement by the Chinese government to emphasize practical, career-training education which includes promoting participation of publicly-listed and industry-leading companies. The Company entering the career-training education field also presents an opportunity for the Company to create strategic partnerships with local Chinese schools which it believes is aligned with China's foreign cooperation goals.

The Company plans to improve the quality of career-training education and to offer a robust externship program to meet what it expects to be a high market demand for technically skilled professionals. Importantly, the Company foresees students in two-year education programs having the opportunity to transfer to highly ranked universities through 'transfer pathway' programs. The Company also anticipates that the career-training educational markets in both the US and China will grow substantially and that with its proven student recruitment capabilities, this potential acquisition represents an excellent growth opportunity for the Company.

The completion of the transaction is subject to due diligence on the part of the Company, the execution of a definitive agreement, the approval of the Company's Board of Directors and the satisfaction of other customary closing conditions. The Company notes that there can be no assurance that a definitive agreement will be entered into or that the proposed acquisition will be consummated.