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PRISA acquires 25% of Santillana


PRISA adquiere el 25% de Santillana
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From left to right, Miguel Ángel Cayuela, CEO of Santillana; Manuel Mirat, CEO of PRISA, Alejandro Sorgentini, partner of Victoria Capital Partners and Xavier Pujol, General Secretary of PRISA.



  • The Group takes a decisive step forward with the takeover of 100% of its education subsidiary
  • The cost of the operation is 312.5 million euros
  • The company increases its free float on the stock market from 16% to 26% after a capital increase totalling 200 million

PRISA and Victoria Capital Partners have signed off on the sale of the latter party’s 25% of Santillana this morning in Madrid. The total amount of the operation is EUR 312.5 million – paid in cash to the seller –and it gives PRISA 100% control of Santillana. Santillana is to pay Victoria Capital Partners the preferred dividend corresponding to its shares for the year 2018 and for the corresponding part of the year 2019 up until today.

This acquisition represents a major new milestone for PRISA, endowing it with full control of an asset – Santillana – that it sees as key to future development. The move also offers enormous potential for increased value for shareholders and substantially improves cash generation.

The opportunities offered by digital transformation and the Group’s positioning and growth margin in Ibero-America are the key levers for developing PRISA's strategy, which involves creating a unique and wide-ranging transversal and global project in the areas of education, entertainment and news (general interest, business and sports). The acquisition of Santillana comes at a time of very promising growth prospects for the education sector.

The company is a leader in Spain and Latin America and is the only global operator in those markets. Santillana is overwhelmingly committed to digital learning systems with a high component of innovation. These have been successfully rolled out (through Sistema UNO, Santillana Compartir and others) across 15 American countries, in more than 3,000 schools and already serve almost 1.5 million users.

The weight of learning systems, in which Santillana leads in Latin America, for the business as a whole is becoming increasingly important and these accounted for 22% of business in 2018 compared to just 10% in 2012, original launch year. These learning systems come complete with an educational methodology, teacher training, equipment for schools, and assessment and consultation platforms. This new business model of digital learning systems offers more reliable revenue streams, with contracts signed for an average term of between 3 and 4 years and an income per student of 120 euros, well above the average revenue per student under the traditional model (60 euros). The average renewal rate is 86% and the gross margin is above 80%. Currently, revenues from digital learning systems account for 37% of total private sales revenues in Latin America.

Given the good prospects for business growth – particularly in the digital sector – the acquisition of 25% of Santillana from Victoria Capital Partners will maximize the value of the asset, as well as enable the Group to increase cash generation by eliminating the annual preferred dividend of 25.8 million dollars and make the company's financial structure more flexible.

The operation has been funded from resources available on PRISA's balance sheet and from the capital increase of 200 million that was closed last Thursday after being previously announced to the markets on March 20. The capital increase has been oversubscribed 20 times, demonstrating the strong market interest in the company. It’s a confidenceshared by investors who were already shareholders of the group and who have subscribed more than 60% of the capital increase. The operation also provides greater liquidity, with the free float increasing from 16% to to 26%.

PRISA set a price of 1.33 euros per share (0.94 euros nominal value, with an issue premium of 0.39 euros each) and has put into circulation 150.24 million new shares. Banco Santander, Morgan Stanley and Alantra Capital Markets have underwritten the operation and Uría Menéndez provided legal advice.

PRISA closed 2018 with a comparable EBITDA of EUR 298 million, which represents an increase of 10.3% with respect to the previous year. Over the past year, an efficiency plan has generated savings of EUR 48.5 million – surpassing in a single year the target of 40 million set for three years. Cash generation was positive – at EUR 42 million – while net debt at the end of the year stood at 929 million, compared to 1,422 million in December 2017. PRISA has also put in place a divestment plan for a total of more than 60 million of euros.

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