Arco Platform Limited, or “Arco” or the “Company” (Nasdaq:
ARCE), today announced that its board of directors has received a
preliminary non-binding proposal (the “Proposal”) dated November
30, 2022 from General Atlantic L.P. (“General Atlantic”) and
Dragoneer Investment Group, LLC (“Dragoneer”) to acquire all of the
outstanding Class A common shares of the Company that are not held
by such parties or Oto Brasil de Sá Cavalcante and Ari de Sá
Cavalcante Neto (together, the “Founders”) or their respective
affiliates (the “Proposed Transaction”).
The proposal states that the Founders support the Proposed
Transaction and will roll over 100% of their Class A common shares
and Class B common shares in the Proposed Transaction, and that
after the closing of the Proposed Transaction, the Founders will
maintain the same economic and voting interest in the Company as
they currently have. The purchase price proposed by General
Atlantic and Dragoneer for each Class A common share is US$11.00 in
cash, which represents an approximately 22% premium over today’s
closing price of US$9.04 per Class A common share. A copy of the
proposal letter is attached hereto as Exhibit A.
The Company cautions its shareholders and others considering
trading in its securities that no decisions have been made with
respect to the Company's response to the proposal. There can be no
assurance that any definitive offer will be made, that any
agreement will be executed or that this or any other transaction
will be approved or consummated. The Company does not undertake any
obligation to provide any updates with respect to this or any other
transaction, except as required by applicable law.
About Arco Platform Limited (Nasdaq: ARCE)
Arco has empowered hundreds of thousands of students to rewrite
their futures through education. Our data-driven learning
methodology, proprietary adaptable curriculum, interactive hybrid
content, and high-quality pedagogical services allow students to
personalize their learning experience while enabling schools to
thrive.
Forward-Looking Statements
This press release contains forward-looking statements
pertaining to the Company within the meaning of the Private
Securities Litigation Reform Act of 1995, including, but not
limited to, the Company’s expectations or predictions of future
financial or business performance. The successful achievement of
the matters covered by statements herein involves substantial known
and unknown risks, uncertainties and assumptions. If any such risks
or uncertainties materialize or if any of the assumptions prove
incorrect, the Company’s results could differ materially from the
results expressed or implied by such statements. You should not
rely upon forward-looking statements as predictions of future
events. Forward-looking statements are made on the basis of the
Company’s current expectations and projections relating to its
financial conditions, result of operations, plans, objectives,
future performance and business, and these statements are not
guarantees of future performance. Forward-looking statements
represent the Company management’s beliefs and assumptions only as
of the date such statements are made, and the Company undertakes no
obligation to update any forward-looking statements made in this
press release to reflect events or circumstances after the date of
this press release or to reflect new information or the occurrence
of unanticipated events, except as required by law.
Further information on these and other factors is included in
filings the Company makes with the Securities and Exchange
Commission from time to time, including the section titled “Risk
Factors” in the Company’s most recent Forms 20-F and 6-K. These
documents are available on the SEC Filings section of the Investor
Relations section of the Company’s website at:
https://investor.arcoplatform.com/.
Exhibit A
November 30, 2022
The Board of Directors (the “Board”) Arco Platform
Limited Rua Augusta 2840 9th floor, suite 91 Consolação, São Paulo
– SP 01412-100, Brazil
Dear Directors:
General Atlantic L.P. (“General Atlantic”) and Dragoneer
Investment Group, LLC (“Dragoneer”) are pleased to submit
this preliminary non-binding proposal to acquire all of the
outstanding Class A common shares (the “Class A Common
Shares”) of Arco Platform Limited (the “Company”) that
are not held by such parties or Oto Brasil de Sá Cavalcante and Ari
de Sá Cavalcante Neto (together, the “Founders”) or their
respective affiliates (the “Proposed Transaction”). The
Founders support the Proposed Transaction and will roll over 100%
of their Class A Common Shares and Class B common shares in the
Proposed Transaction. After the closing of the Proposed
Transaction, the Founders will maintain the same economic and
voting interest in the Company as they currently have. While not
required to consummate the Proposed Transaction, General Atlantic
and Dragoneer are open to discussing rollover opportunities for
additional shareholders if that is of interest.
The purchase price proposed by General Atlantic and Dragoneer
for each Class A Common Share is US$11.00 in cash, which offers
significant value to the Company’s shareholders and represents
approximately a 22% premium over yesterday’s closing price of
US$9.04 per Class A Common Share.
The principal terms and conditions of the Proposed Transaction
will be set forth in definitive agreements to be negotiated with
the Company, which we expect will contain representations,
warranties, covenants and conditions that are customary and
appropriate for transactions of this type (the “Definitive
Agreements”). Consummation of the Proposed Transaction would be
contingent on receipt of any required regulatory or shareholder
approvals and other customary conditions to closing. The Proposed
Transaction would not be subject to a financing condition.
General Atlantic and Dragoneer are prepared to fully backstop
the funds needed to acquire the Class A Common Shares with equity
and are responsible for negotiating the price to be paid per Class
A Common Share. The cash necessary to complete the Proposed
Transaction would come from General Atlantic and Dragoneer’s
respective affiliated investment funds. General Atlantic has
approximately $73 billion in assets under management inclusive of
all products as of June 30, 2022. Dragoneer has more than $22
billion in assets under management as of June 30, 2022.
As existing and long-term investors and partners of the Company,
we believe that we are particularly well-suited to lead a take
private transaction and to partner with the Company to achieve its
long-term strategic goals. In addition, given our familiarity with
the Company’s business and operations, we are well-positioned to
complete negotiations and execute definitive documentation in an
expeditious manner.
In considering this proposal, you should be aware that the
Founders, General Atlantic and Dragoneer have entered into an
exclusivity agreement and are interested only in pursuing the
Proposed Transaction and do not intend to sell their respective
stakes in the Company to any third party. We recognize that the
Board or a committee thereof will evaluate the Proposed Transaction
independently before they can make their determination whether to
endorse it, and the Founders and our respective affiliated
directors will recuse themselves from any discussions and
negotiations. As required by law, we each will promptly update our
beneficial ownership filings with the U.S. Securities and Exchange
Commission to disclose this proposal. That aside, we believe that
it is in all of our interests to proceed with our discussions
relating to the Proposed Transaction in a confidential manner,
unless otherwise required by law, until we have executed the
Definitive Agreements or terminated our discussions.
This proposal is not a binding offer, agreement or an agreement
to make a binding offer. This proposal is our preliminary
indication of interest and does not contain all matters upon which
agreement must be reached in order to consummate the Proposed
Transaction, nor does it create any binding rights or obligations
in favor of any person. A binding commitment will result only from
the execution of the Definitive Agreements, and then will be on the
terms and conditions provided in the Definitive Agreements.
We are confident in our ability to consummate the Proposed
Transaction as outlined in this proposal and would like to express
our commitment to working together with the Board and any committee
thereof to bring the Proposed Transaction to a successful and
timely consummation. We and our advisors are available at your
convenience to discuss any aspects of our proposal. We look forward
to hearing from you.
Sincerely,
General Atlantic L.P. By: /s/ Michael Gosk Name: Michael
Gosk Title: Managing Director
Dragoneer Investment Group, LLC By: /s/ Michael Dimitruk
Name: Michael Dimitruk Title: Vice President
Oto Brasil de Sá Cavalcante By: /s/ Oto Brasil de Sá
Cavalcante
Ari de Sá Cavalcante Neto By: /s/ Ari de Sá Cavalcante
Neto
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Investor Relations Contact Arco Platform Limited
IR@arcoeducacao.com.br https://investor.arcoplatform.com/
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