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ATA Announces Entry into Framework Agreement for Strategic Investment in Chinese

2018-03-27 157

Beijing, China, March 26, 2018 -- 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 Education

As 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 Services

Beijing 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 Investment

Under the terms of the agreement, ATA will provide US(.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(.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(.0 million plus interest accrued thereon upon maturity of the convertible bonds’ one-year term.

 Management Commentary

Mr. Jack Huang, ATAs 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.

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