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National Company for Learning & Education announces signing a share purchase agreement with the owners of Refan Company for Operation & Maintenance Limited (limited liability company)

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Introduction Pursuant to the announcement made by National Company for Learning & Education (“NCLE”) published on 15/01/1442 H Corresponding to 03/09/2020 G, with regards to the signing of MoU on 15/01/1442 H Corresponding to 03/09/2020 G, NCLE announces signing a share purchase agreement to purchase 100% of share capital of Refan Company for Operation & Maintenance Limited (limited liability company) (“Refan”) for (946,000) Saudi Riyals, which will be paid in cash.
Transaction Details NCLE announces signing a share purchase agreement (“Agreement”) on 11/03/1442 H Corresponding to 28/10/2020 G to purchase (2,000) shares in Refan which represents 100% of the share capital for an agreed price of (946,000) Saudi Riyals.

The valuation of Refan was done using different methods such as Discounted Cash Flow, P/E and EBITDA Multiples methods.

Transaction Value (946,000) Saudi Riyals
Transaction Terms The agreement contains number of warrants and representations by the Sellers regarding the commercial aspects such as the accuracy of information in Refans’ accounts and financial statements and the validity of assets ownership, in addition to other warrants related to Refan’s liabilities and its employees as well as the indemnification of any unrecorded liabilities or any differences in the zakat obligations for the period prior to closing date. The agreement is also subject to a number of conditions precedent that must be fulfilled by the Sellers during (180) days from the date of signing the agreement (“the closing date”), including obtaining the necessary regulatory approvals.

In addition, the agreement includes the Sellers obligation to maintain Refan’s commercial operation as usual and to sustain all contractual relationships with its suppliers and customers as well as its responsibility to its employees and the compliance with all the regulations in Saudi Arabia. The agreement also includes restrictions to the Sellers in carrying specific tasks and work specified in the agreement and its annexes prior to receiving written consent of the buyer.

Parties of the Transaction National Company for Learning & Education (“Buyer”) ,

Aaj Real Estate Investments Company - Yamami Company (“Sellers”)

Transaction Funding Method The purchase price will be paid in cash to Refan’s owners upon completion of the process of singing the amended article of association as per the regulations. Note that the transaction will be funded through NCLE’s internal resources.
Transaction Execution Date 2020-10-28 Corresponding to 1442-03-11
Description of the Business of the Asset forming the Subject Matter of the Transaction Refan provides maintenance, catering, and cleaning services to private and public entities
Financial Statements for the Last Three Years of the Asset forming the Subject Matter of the Transaction Refan recorded in its audited financial statements a revenue of SR 1.6 million, SR 4.4 million, and SR 6.6 million on 2017, 2018 and 2019, respectively. Additionally, the company recorded a net profit (loss) of SR 65 thousand, SR -234 thousand and SR 228 thousand on 2017, 2018 and 2019 respectively.
Transaction reasons The deal when executed will result in a reduction in operational expenses related to the current operation and maintenance contract with Refan, which is a variable based on the number of labors Refan Company provide to NCLE. In addition, the transaction is part of company strategy is to establish a new segment specialized in providing educational supporting services given the company expansion in opening new schools which include services for cleaning, maintenance, transportation, canteens and other educational supporting services
Expected Impact of the Transaction on the Company and Its Operations NCLE expects a positive impact in general as a result of the reduction in operational expenses related to the current operation and maintenance contract with Refan which will be reflected on the performance results throughout the fiscal year ending on 31/08/2021.
Related Parties - Khalid Mohammed Al-Khudair - the Chairman of Board of Directors at NCLE - has an indirect interest as a shareholder in Aaj Real Estate Investments Company (owner in Refan Company) and Yamami Company (owner in Refan Company)

- Mohammed Al-Khudair Real Estate Development Company - a major shareholder at NCLE- has an indirect interest as a major shareholder in Aaj Real Estate Investments Company (owner in Refan Company)

- Muhammed Ibrahim Al-Khudair Endowment - a major shareholder at NCLE- has an indirect interest as a major shareholder in Aaj Real Estate Investments Company (owner in Refan company)

- Mohammed Khalid Al-Khudair - the CEO of NCLE - has an indirect interest as a shareholder in Yamami Company (owner in Refan company)-

The related parties collectively own 62.1% of the shares in NCLE and indirectly own 70.8% of the shares in Refan.

Additional Information The signing of this agreement does not mean that the transaction is closed, since the closing is subject to obtaining the General Authority for Competition’s approval.

NCLE will announce closing the transaction or any major update in due time.

The Capital Market Authority and the Saudi Stock Exchange take no responsibility for the contents of this disclosure, make no representations as to its accuracy or completeness, and expressly disclaim any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of this disclosure, and the issuer accepts full responsibility for the accuracy of the information contained in it and confirms, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts or information the omission of which would make the disclosure misleading, incomplete or inaccurate.

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