SAO PAULO (Reuters) - Brazil’s for-profit education company Kroton Educacional SA (KROT3.SA) sees “a lot of room” for more acquisitions following a series of deals, Chief Executive Officer Rodrigo Galindo told journalists on Monday.
Days after closing the acquisition of K12 schools operator Somos Educação SA, Galindo said he still wants to acquire new for-profit college operators, even after the largest deal in the segment, a proposed merger with Estacio Participações SA, was rejected by Brazil’s antitrust watchdog Cade.
Since the watchdog decision, Kroton has already acquired three other companies including Somos. Galindo expects the mandatory buyout offer to minority shareholders to be concluded by May next year. Kroton plans to delist Somos and use the company as a platform for new acquisitions of K-12 schools.
Kroton expects to complete integration of Somos within two years, and Galindo said he expects synergies of 300 million reais over four years.
Kroton’s CEO said the company is “ready to offer” new distance learnings systems as the use of distance learning is under discussion by Education Ministry.
State-financed student loans, which have been cut amid Brazil’s large public deficit, had already lost importance on driving demand for higher education, Galindo said. The number of new students financed by state-financed Fies fell 65 percent in the first half of the year.
Reporting by Gabriela Mello and Tatiana Bautzer; editing by Grant McCool