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August 08, 2011

Gaba to be sold to Nichii Gakkan for $127 million

Teaching-English-in-Japan-Education-Gaba-sold" Nichii Gakkan, a medical / education business has confirmed that it intends to purchase shares of the English conversation school chain Gaba in an attempt to bolster its education business. The company plans to spend up to 10 billion yen (around 127 million dollars) to make Gaba a wholly owned subsidiary. Nichii said it will buy at least the 26,390 shares owned by Gaba's main shareholder, Daiwa Corporate Investment Co. It set no maximum number of shares that it will purchase.

The offer price of 200,000 yen per share is a 53% premium over Friday's close. Gaba, a company listed on the Mothers section of the Tokyo Stock Exchange, has agreed to the move.

Gaba operates classes at 36 locations in the nation's three major metropolitan areas and had sales of 7.75 billion yen and 596 million yen in net profit for the year ended December 2010.

Accoding to the Nihon Keizai Shinbun, Nichii is "seeking to broaden its lineup of educational services by adding programs that use the Internet to teach English. Even though its offerings have expanded beyond its mainstay preparatory courses for medical and nursing licenses, it is still struggling. The firm expects the Gaba brand to help it win contracts for corporate English training and to expand its online offerings."

Gaba was founded by Hideki and Karen Yoshino in 1995 before being sold to NIF Capital Management in 2004, reportedly for tens of millions of dollars. It went public on Mothers in 2006 with a share price of ¥276,000. The value of those shares steadily sunk to a low of just over ¥13,000 in February 2009 before bouncing back to its current ¥130,000 level.

See also:
Gaba website (in Japanese)
Nichii Gakkan website (in Japanese)
NIF buys Gaba (2004)
Gaba to go public (2006)
Daiwa Corporate Investment website

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Oh, the Gaba that's being sued for union busting among other things...

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