The merger deal between Zee Learn Ltd, the education arm of Essel Group, and Tree House Education & Accessories, the pre-school chain has been put on hold for the time being. However, Zee Learn Ltd will be setting up a committee to come up with some options to save the merger deal.
The reason for this is that Zee Learn does not want to go ahead with the previously agreed share exchange ratio of 53 shares of the company for 10 shares of Tree House. The Pre-school chain, Tree House has been facing revenue crisis since a year now, with its revenue almost fallen down to half.
It is being believed that Zee Learn and Tree House will come up with a revised plan so that the deal doesn’t face any hurdle from Zee’s shareholders who would not like to give more shares, looking at the awful financial state of Tree House.
Zee Learn is the name behind running the country’s largest pre-school chain under the KidZee brand with 1,350 centres, entirely through franchisees. It also runs the second-largest school chain under Mount Litera brand with 87 centres. Moreover, it runs 31 vocational training institutes under ZEE Institute of Creative Art and one centre under Zee Institute of Media Arts as well.
Tree House, PE-backed company has 636 centres in 96 cities. Most of them are self-operated, while the rest are franchisees. It also offers consultancy services and runs 24 K12 schools that teach from kindergarten to 12th grade. Financial performance of Tree-House has been falling since years, as it had scaled down its operations last year also. Until last year, it had 720 pre-schools in 103 cities.