EdTechX Holdings Announces Combination with Meten Education


EdTechX Holdings Announces Combination with Meten Education

Dec 12, 2019 INTEL by Kristi Marvin

In a surprise mid-day announcement, EdTechX Holdings Acquisition Corp., revealed that it has entered into a definitive agreement with Meten Education, (“Meten”),  a market leader in English Learning Training (“ELT”) in China.  The transaction has an implied equity value of $535 million and an implied enterprise value of $614 million.

Meten operates an omnichannel (retail and digital) business comprising a nationwide network of 149 new generation learning centres (covering 32 cities in 14 provinces) under the brands Meten (adult) and ABC (junior brand), as well as the popular English digital tutoring platform for young professionals, Likeshuo.  In January 2019, Meten raised a series C of $43 million led by China International Capital Corporation (CICC).

The combined entity will operate as Meten EdtechX and focus on providing industry leading English and future skills training for a growing market of Chinese students and young professionals. Meten EdtechX intends to pursue expansion plans including market consolidation in China and the roll out of Meten’s existing omni-channel distribution platform, combining digital delivery and strategic retail presence, across a total addressable market of more than 600 cities in China.

In connection with the transaction, EdtechX may provide Meten with up to $100 million of capital, including through the draw-down of up to $20 million from an irrevocable commitment provided by Azimut pursuant to a forward purchase contract originally entered into in connection with EdtechX’s initial public offering. These proceeds are expected to mostly fund future expansion as well as potential synergistic and accretive acquisitions.

The transaction is expected to close in the first quarter of 2020.

Quick Takes:  Since this was a mid-day announcement without any filed documents or a presentation, we’ll have to wait to get a more complete picture, but on the face of it, this looks like a decent sized acquisition in the EdTech space for a $63.3 million SPAC (at IPO). Existing shareholders are rolling 100% of their equity and there are some price hurdles attached to the earnout, so management is incentivized to perform.  Plus, EdTechX has room to close this deal by April 10, 2020 (their SPAC deadline), so an extension that depletes the trust is probably not going to be an issue.  Also, keep in mind that EdTechX was one of the first SPACs to use the Crescent Term with a price hurdle of $9.50, so if a PIPE becomes necessary, warrant holders have some protection.  However, EdTechX also has that $20 million forward purchase commitment from Azimut, but Azimut is a $61 billion asset manager, so if additional funding become necessary, that’s a nice “rich uncle” to have if you need to hit him up for more money.  All told, this is a fairly straightforward SPAC acquisition without any complicated back-end arrangements (so far).  In general, if a SPAC combination structure can stand on it’s own merits without needing a variety of backstops to get it done, that’s always preferable.  Let’s see if sector investors like it.

Summary of Transaction

The current shareholders of Meten will receive consideration of approximately 51.4 million shares of the combined entity on closing of the transaction, representing $535 million in equity value, and Meten’s shareholders are rolling over up to 100% of their equity in the transaction.

Under the terms of the proposed transaction, the parties will form New Holdco, and EdtechX and Meten will become subsidiaries of New Holdco.

  • Upon closing of the transaction, New Holdco is expected to have an initial fully diluted enterprise value of $614 million, implying respectively 19.3x and 14.3x 2020 and 2021 projected Adjusted EBITDA.


Certain Meten shareholders may receive up to:

  • 4.0 million shares if New Holdco’s share price exceeds $12.50 by fiscal year 2022
  • 7.0 million shares if the share price exceeds $15.00 by fiscal year 2023.


Benjamin Vedrenne-Cloquet (CEO) and Charles McIntyre (Chairman and CIO), the founders of EdtechX, will sit on the board of New Holdco, as independent directors, alongside Meten’s founders.


  • Chardan is acting as financial and capital market advisor to EdtechX
  • Macquarie is acting as financial advisor to Meten
  • Graubard Miller LLP is acting as legal counsel to EdtechX
  • Morgan, Lewis & Bockius is acting as legal counsel to Meten