Anna Chu, an MBA from the Singapore Management University, Temasek Holdings Pte and new employees. Ltd., was excited by ANB AMRO’s assessment of ABC Learning Centres Limited (ABC), an Australian company that daycare centers. Chu was hired to analyze companies in which Temasek shares acquired and report regularly to the fund’s portfolio manager services. In May 2007, Temasek, Singapore’s sovereign wealth fund, 12% of ABC Learning Centre acquired equity for $ A7.30 per share, or a … Read more »

Anna Chu, an MBA from the Singapore Management University, Temasek Holdings Pte and new employees. Ltd., was excited by ANB AMRO’s assessment of ABC Learning Centres Limited (ABC), an Australian company that daycare centers. Chu was hired to analyze companies in which Temasek shares acquired and report regularly to the fund’s portfolio manager services. In May 2007, Temasek, Singapore’s sovereign wealth fund, 12% of ABC Learning Centre acquired equity for $ A7.30 per share or a total purchase price of A $ 400 million Euros. If ANB AMRO evaluation of the value of the ABC share price proved to be correct, Temasek’s investment would be very profitable. But some observers questioned aspects of the ABC business model, in particular the public process for raising capital and outsourcing services for the learning centers. By January 2008, ABC Learning Centres Ltd was the largest operator of private daycare centers in the world, with more than 2,200 centers in Australia, the U.S., the UK and New Zealand. ABC of the growth strategy of cobbling together a global empire from day care centers had financed with short-term debt. In January 2008, the Company announced semi-annual earnings that were lower than analysts’ estimates, sending the company’s stock price into a tailspin.
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from
Graeme Rankine
Source: Thunderbird School of Global Management
16 pages.
Release Date: 20, May 2013. Prod #: TB0331-PDF-ENG
It’s as simple as ABC … Learning Centres Ltd. HBR case solution

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