The company confirmed its interest in potential business in the sector, but stated that there is no agreement to date (Image: Disclosure/Vitru)
The education company Glass (VTRU3) confirmed the hiring of banks Itau BBA and of the UBS BB to find a potential buyer or a potential partner in a merger transaction.
In a statement to the market, the company said, however, that to date “it has not entered into any memorandum of understanding or other similar or binding document on the subject”.
Earlier, the Pipeline portal, from Valor Econômico, reported that negotiations for the merger between Vitru and Cruzeiro do Sul Educacional (CSED3) were on the table, with advice from BTG Pactual.
Yduqs (YDUQ3) would also have entered the company's radar. In this case, Vitru would be interested in acquiring the company.
It is worth mentioning that Vitru has among its main shareholders funds such as SPX, Carlyle, Vinci, Crescera and 23S. The Zaher family and Advent are reference shareholders of Yduqs and Cruzeiro do Sul is invested in by GIC.
The Bonuses (and Burdens) of Vitru’s Potential Operations
In Ativa Investimentos' assessment, the possible acquisition of Vitru by Yduqs presents both significant opportunities and challenges.
“If completed, the merger would result in a company with more than 30% share of the distance education market, covering approximately 1.4 million students, which would reinforce Yduqs’ position in this strategic and high-margin segment,” the report says.
On the other hand, to obtain approval from the Administrative Council for Economic Defense (CADE), companies would be subject to divestments.
Furthermore, the brokerage firm believes that a critical aspect would be the price of the transaction. In recent months, the education sector has seen a sharp devaluation of shares.
Vitru (VTRU3) shares have accumulated a drop of more than 31% this year. Yduqs (YDUQ3) has plummeted 55% and Cruzeiro do Sul (CSED3) has fallen around 34% since January.
“Vitru will likely demand a premium to its current price, which implies a higher valuation than the market currently attributes to Yduqs’ distance education,” write Ativa analysts.
“We believe that, unless the acquisition takes place through a share exchange, the growth in Yduqs' leverage in a scenario of rising interest rates and a negative history of M&As (mergers and acquisitions) in the education sector will be poorly received by the market.”