Now entrenched in the New Zealand education ecosystem, thanks to Intueri, Arowana was uniquely aware of acquisition opportunities. In May 2011 we acquired Elite International, an Auckland-based leader in the provision of beauty and spa treatment vocational training. This was followed by the acquisitions in February 2013 of three other North Island-based businesses: Cut Above Academy (the leading hairdressing college in the country), NSIA College (the leading culinary school in NZ), and the NZSCDT (the leading commercial diving school in the Southern Hemisphere at the time). Buying and onboarding one business is challenging enough, let alone three, but Arowana had developed a 90-day onboarding and integration plan for the business. We had a very clear idea of what we were going to do day by day for the first 90 days and a well-defined strategy and execution plan for the first 12 months.
Unfortunately, the execution of this onboarding plan faltered, and by July 2013 the CEO resigned suddenly. Facing an unexpected 30% shortfall against budget, Arowana quickly mobilised, bringing in a team led by Kevin Chin to get the process on track and to turn around the budget shortfall—we had six months to do this.
Codenamed “Operation Mahi Mahi”, the plan involved the introduction of Rockefeller Habits as a corporate planning and communications rhythm tool, the rollout of KPIs and the introduction of a shared services platform encompassing governance, accounting, IT, marketing, and compliance. Importantly, galvanising the sales force to drive more international student revenues was a key priority. By the end of December 2013, Intueri had recovered and soared to more than 20% ahead of budget, a remarkable outcome given what had to be done.
Confident that we had the core business back on track and fully onboarded and integrated, Arowana thus set about looking at other acquisition opportunities. A transformational acquisition opportunity called Quantum Education Group in NZ presented itself. At the time, it was the largest single PTE (private training establishment) in the country, and its acquisition would double the size of the Intueri group. Given Quantum had just undergone a comprehensive regulatory audit by the TEC, which had reported a clean bill of health in December 2013, Arowana struck a deal in February 2014. At the same time, we acquired 50% of a fast-growing online education business in Australia called Online Courses Australia.
In May 2014, Intueri consummated its IPO on the NZ Stock Exchange and the Australian Securities Exchange, with an initial market capitalisation of NZ$235m. Arowana secured a return of approximately 7x its original invested capital and a 129% IRR. This is based on proceeds received from the sell down of 75% of its shareholding into the IPO and was also partly thanks to the strengthening of the NZD by approximately 25% from the time of Arowana’s initial investment.
Our perspective on vocational education and an insight into our experiences and learnings from Intueri can be found below.Arowana International – Vocational and Professional Education and Training