As the business just got a takeover bid, Arco Platform Limited (NASD: ARCE) has increased 21.74% to $11.01 in the current market price as of the most recent check on Thursday.
What suggestion did ARCE receive?
General Atlantic L.P. (“General Atlantic”) and Dragoneer Investment Group, LLC (“Dragoneer”) have submitted a preliminary non-binding proposal (the “Proposal”) to Arco Platform (ARCE)’s of directors, which was received today and is dated November 30, 2022.. The proposal was to purchase all of the existing Class A common shares of Arco Platform that are not already owned by such persons, Oto Brasil de Sá Cavalcante, Ari de Sá Cavalcante Neto (collectively, the “Founders”), or any of their respective affiliates (the “Proposed Transaction”).
According to the plan, the Founders will roll over all of their Class A common shares and Class B common shares in the proposed transaction and support it. The Founders will continue to hold the same economic and voting stake in ACRE following the completion of the Proposed Transaction. General Atlantic and Dragoneer are offering to pay US$11.00 in cash for each Class A common share, which is an increase of around 22% above yesterday’s closing price of US$9.04 per share.
Recent Acquisition Move by ACRE:
A formal agreement (the “Purchase Agreement”) between Arco Platform and INCO Limited (d/b/a isaac), a supplier of an all-in-one platform that delivers a variety of financial and software solutions to K–12 schools, was signed in October (the “Transaction”). Arco ownership holdings will be used to pay the transaction’s purchase price. Arco already owned 24.9% of Isaac’s issued and outstanding equity interests before to the Transaction.
What motivated ACRE to make the purchase?
By broadening the scope of its product line and transforming Arco Platform (ACRE) into a genuine one-stop shop for its partner schools, the purchase of isaac considerably increases Arco’s footprint in Brazil’s education ecosystem while forging deeper ties with parents. After becoming an early investor in the firm and developing faith in both its business model and development potential as a stand-alone entity as well as the synergies and possibilities that would result from the merging of the two businesses, ACRE took the decision to purchase isaac.