Crimson Academies chief executive Penelope Barton - pictured in front of AGE School in Takapuna this morning- says her firm's shift to a hybrid model will allow students to mix-and-match online and face-to-face learning. Photo / Dean Purcell
Crimson Academies chief executive Penelope Barton - pictured in front of AGE School in Takapuna this morning- says her firm's shift to a hybrid model will allow students to mix-and-match online and face-to-face learning. Photo / Dean Purcell
The Jamie Beaton-founded Crimson Education has bought its first physical school - AGE School in Takapuna, which caters to Years 1 - 13.
A deal finalised last night saw Crimson agree to acquire AGE Ltd, a fully-owned subsidiary of NZX-listed Being AI - which recently resumed trading after being suspendedfor 10 weeks by the stock exchange’s compliance unit. The deal also includes the online Mt Hobson Academy.
The deal is small potatoes in financial terms.
“We’re essentially just taking over the debts and liabilities - and we’ll take over all the staff and payroll expenses,” Crimson Academies chief executive Penelope Barton told the Herald. She said the debts and liabilities totalled $3.9m.
And it’s modest in scale. AGE has 70 pupils and Mt Hobson 67, Barton said.
But she said the deal was significant for two reasons.
First, it gave Crimson access to the NZ curriculum for the first time. AGE students will have the choice to learn NCEA or an international curriculum or both.
Second, it was the start of a shift to a “hybrid” model of both physical schools and online education.
Crimson currently has around 2200 students around the globe in its Crimson Global Academy online high school, which offers full and part-time courses; the firm also offers tutoring and a consultancy that helps high school students get into top universities.
The newly formed Crimson Academies will oversee both physical and online schools.
Crimson plans to open a second bricks-and-mortar school in the Auckland suburb next year, Barton said.
A call for expressions of interest will go out shortly.
The 760sqm AGE School in Takapuna, which Crimson describes as an 'urban school'.
“Wellington and Christchurch would be other natural extension points and we’ll be looking to expand into Australia and the US.”
The second Takapuna school will cater to around 200 Year 9 to 13 students, with the same model as the existing AGE, which has class sizes of 10 to 12 students and fees running from $21,630 per year for Year 1 and 2 students to $26,922 for Year 12 and 13 students (putting it mid-table for a private school) - plus various levies totalling $3900).
Barton with Crimson Education founder Jamie Beaton and Crimson senior advisor Sir John Key.
Crimson’s coffers are well-stocked for an expansion. In November, Beaton’s firm raised $68m at a $1 billion valuation.
Being AI tried and failed to gain a charter school licence.
Barton said there was no charter school element to the deal.
Crimson had a strong, “collegial” relationship with private schools, Barton said, and supported its students - or, at least, their parents, hiring Crimson tutors and consultants.
She did not see Crimson entering the private school business affecting that relationship, citing the long wait-lists for elite private schools.
$12.8m valuation
Being AI reverse-listed on the NZX in April 2, 2024 after Ascension Capital’s acquisition of the Being AI group of businesses, which included AGE, the mail and logistics firm Send Global, and a newly created AI business that had plans to hire expert consultants (post-transaction, Ascension rebranded as Being AI).
In documents released by Being AI before its listing on the NZX in April last year, independent valuer Armillary gave AGE a valuation range of $9.8m to $15m, with a midpoint of $12.8 million. The Ascension transaction valued the school at $15m.
AGE, which at the time was described as a 100-student school, had revenue of $2.3m and a $0.1m ebitda loss.
On April 8, AGE, as a fully-owned Being subsidiary, bought “online education platform” Mt Hobson Academy for $200,000.
Being AI director on what went wrong
In an NZX statement, Being AI said the decision to divest its education business was part of an ongoing strategic review.
Chairman Michael Stiassny, who was appointed on March 31, said the strategic review of remaining Being AI group entities “is ongoing with further market announcements anticipated”.
How did AGE go from a $12.8m valuation to being given away? Director Katherine Allsopp-Smith told the Herald, “Use of capital was too heavy in the technology space which meant the vision for the education group couldn’t be executed”.
Allsopp-Smith said it was “no secret” that she and Being AI chief executive David McDonald had been in conflict about the direction of the company. McDonald resigned from the board on March 7.
Stiassny told the Herald, “I’ve spent a lot of time in education. It’s a hard place to be. What they were trying to achieve required a lot of capital. We didn’t have any. It’s found a good home. We can move on”.
There was no timeline for the ongoing strategic review. A delisting was not on the table, Stiassny said.
Losses, resignations
Being AI’s unaudited half-year result released on November 29 last year - its first financials since listing - saw Being AI book a $35.6m loss, primarily as the result of write-downs.
The results listed related-party loans including $10.1m (of which $1.75m was payable by AGE) owed to Wilshire Treasury, owned by a trust controlled by Being AI directors Allsopp-Smith and Evan Christian.
Being AI leased the AGE School and its land from Wilshire.
“$318,000 was paid or payable in rent to Wilshire Holdings in the period ended September 2024,″ the results said.
NZX enforcement unit RegCo suspended Being AI from trading on February 2 after a series of resignations left the firm short of the required number of independent directors.
On March 31, Being AI named Stiassny, Greg Cross and Steve Philips as independent directors but NZX kept its suspension in place pending an update on the firm’s finances.
In the interim, Being AI relocated its headquarters from upmarket Takapuna to a light-industrial area of Avondale in West Auckland and eliminated its chief marketing officer and vice-president of HR roles.
Being AI shares were recently trading at 0.2c. The stock is down 77% for the year.
Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.
