ChinaEdu Prices IPO

NEW YORK (AP) – Shares of ChinaEdu Corp., which provides educational services in China, are expected to begin trading Tuesday after the company's initial public offering priced at $10 per share, the low end of expectations.


According to Securities and Exchange Commission filings, ChinaEdu expected the IPO, which totaled 6.8 million American Depositary Shares to price between $10 and $12 each. Each ADS represents three ordinary shares.


ChinaEdu is selling about 5.5 million of the ADS and a group of selling stockholders is offering the roughly 1.4 million ADS remaining.


The company expects to receive net proceeds of about $47.3 million from its portion of the IPO. The offering is expected to close on Friday, pending customary closing conditions.


ChinaEdu plans to use the proceeds from its portion of the offering to expand its business, to develop its own initial network of learning centers, to complete the construction of new campuses and for general corporate purposes.


Bear Stearns is lead underwriter. Piper Jaffray and CIBC World Markets are also underwriting the offering.


The underwriters have an option to buy up to about 1 million additional ADS from the company and some of the selling stockholders to cover any overallotments.


ChinaEdu is a Cayman Islands company with executive offices in Beijing.


The company provides comprehensive services for the online degree programs of leading Chinese universities, including academic program development, technology services, enrollment marketing, student support services and finance operations.


ChinaEdu also operates private primary and secondary schools, offers online tutoring services to primary and secondary school students, and markets and supports established international post-secondary and English language curriculum programs.


The company has strategic relationships with eleven universities, nine of which are under long-term, exclusive contracts that vary from 15 to 50 years.


For the six months ended June 30, ChinaEdu reported earnings of $1.6 million on revenue of about $15.8 million.


ChinaEdu Chairman and Chief Executive Julia Huang was previously a senior manager at Ernst & Young Management Consulting Group in New York. She was also a project manager at Merck & Co.


ChinaEdu shares will trade on the Nasdaq Global Market under the symbol “CEDU.”



peHUB Note: Shareholders include Tiger Global (19.82% pre-IPO stake), McGraw-Hill Cos. (6.61%), IDG Technology Ventures (4.5%), UOB Venture Technology Investments (2.68%) and EcoChina Investments (1.47%).