- Kip McGrath Education Centres (KME) agrees to purchase a 70 per cent stake in tutoring business Tutorfly for US$500,000 (around A$A$682,000)
- A further payment of this amount will be paid when the business hits revenue targets
- Under the agreement, Kip McGrath will be given an option to purchase the remaining interest in Tutorfly for US$2 million (about A$2.7 million)
- KME closed up 4.11 per cent at $1.14 per share on September 1
Kip McGrath Education Centres (KME) has agreed to purchase a 70 per cent stake in US-based business Tutorfly.
Tutorfly is a tutoring business concentrating on the peer-to-peer section of the market, which achieved rapid growth during its initial start-up phase.
KME will purchase Tutorfly for an initial payment of US$500,000 (approximately A$682,000). A further payment of this amount will be paid when the business hits revenue targets.
Under the agreement, Kip McGrath will be given an option to purchase the remaining interest in Tutorfly for US$2 million (about A$2.7 million).
This option may be exercised once the business achieves US$50,000 (A$68,000) per month net revenue targets.
Completion of this purchase is expected this month, however is subject to certain conditions being met.
KME CEO and Managing Director Storm McGrath said this purchase was a strategic move for the company.
“We are looking to expand our business into other areas of the tutoring and
supplementary education market and in particular the US, which is the largest tutoring market in the world,” Mr McGrath said.
“Tutorfly is a marketplace business where tutors and students are matched through a pairing algorithm with software which is globally scalable.”
Co-founder and CEO of Tutorfly Parsa Rezvani is also pleased with the deal.
“The Tutorfly brand is already well established in tutoring marketplaces across the US and allows parents to browse, contact and hold virtual tutoring sessions with tutors of their choosing, without needing to go through a Tutorfly employee,” Mr Rezvani said.
“The Tutorfly Team is especially excited to team up with Kip McGrath to further equip Tutorfly tutors and students with proprietary Kip McGrath content, curriculum, and training materials.”
Interestingly, the global tutoring market is changing, as parents and governments are looking at ways to close the gap created by COVID-19 and ensuring children have the potential to reach their highest potential.
KME closed up 4.11 per cent at $1.14 per share on September 1.