CIBT Education to Buy KGIC Assets

December 18, 2009 CNW: CIBT Education Group Inc. (NYSE Amex & TSXV symbol: MBA) is pleased to announce that it has entered into a Letter of Intent with KGIC Education Group (“KGIC”) of Vancouver, British Columbia to acquire all of the assets of KGIC. The parties will conduct legal and accounting due diligence reviews while the formal purchase agreement is being prepared. The acquisition is slated for closing in early 2010. Details of the transaction will be announced upon closing.

KGIC Education Group is one of the largest private English language training schools and business colleges in Canada with 7 campuses in Canada and KGIC training centers and branch offices in China, Brazil, Japan, Korea, Taiwan and Mexico. In 2008 and 2009, KGIC enrolled over 6,200 students and 6,400 respectively and generated nearly $15 million revenue per year.

Good News For Canada: Overseas Spending on Education Huge

Toby Chu of CIBT Education writes in to alert us to a report about overseas spending on education, or how much money comes into an economy from education-seeking overseas students. It's skewed towards Canada, but:

The report shows the amount of spending by international students and the economic impact it has on the Canadian economy. From “China market” alone, international education services accounted for $1.31 billion to Canada’s export revenue, ranked no 1 on all other export of goods from Canada to China (table 15, Page 31). Total revenue from the Top 10 Student source countries amounted to $5.5B dollars of direct education spending (tuition). Yet, Canada is far behind from Australia, Japan or New Zealand ranked only 4th place in global market share at an annual growth rate of 8% (22% for New Zealand).

The good news is: Canada has the resources and attraction that are appealing to international students, plenty of room for growth and the competition is still light when compared to the big picture. Recent announcements by the Canadian federal and provincial government indicated their strong support on the international education which is also encouraging news for Canada’s international education sector.

At CIBT, our two core business objectives are, from our corporate mission statement:

"1) using Canada as our solid base to export western education to emerging Asia, and

2) using our growing infrastructure in Asia to attract international students to study in North America”.

I am not aware of any other for-profit education player that offers the same service and business model as CIBT, or has the same level of infrastructure ``both in Asia and North America`` that is ready to capture this growing market. Finally, among the Top 10 International Student Source Countries in the world, CIBT & Sprott Shaw has operations or student recruitment teams located on the grounds of 8 out of 10 countries.

Toby Chu will be speaking at the Education Industry Investment Forum.

Toby Chu and CIBT Education: The Future is Overseas

Just before I left Vancouver last weekend, I met up with Toby Chu, CEO of CIBT Education. We discussed the group's recent investment in Sprott-Shaw Community Colleges, the differences between the Canadian for-profit industry and the United States for-profit leaders, as well as the future of investing in education.

Chu, who travels all over the world, especially to China, sees branding, marketing and delivering a "Western" model of education to overseas partners as a strong trend in the education industry in the next twenty years. He also sees a lot of students coming to Vancouver from overseas to take their course of study from Sprott-Shaw to take with them back home.

We have an interview with Dean Duperron, President of Sprott-Shaw, coming up later in the week.

Here's Chu with some points on foreign / overseas education: