Child care service provider, G8 Education (ASX:GEM) has inked a deal to sell 25 of its centres in Western Australia to Sparrow Early Learning for approximately $6.4 million.
Sparrow is an existing provider of early childhood education through its network of 34 day care centres across Queensland and Victoria. Completion is targeted for December 2019.
As a result of the divestment, the Group will realise substantial capex savings along with an annual cost reduction of approximately $330,000 per annum.
The funds will be used to repay debt and grow opportunities.
Shares in G8 Education (ASX:GEM) are trading 13.9 per cent lower at $2.23.