ATA, Inc. (ATAI) Declares $6.00 Special Cash Dividend; Reports ATA Online Sale Transaction Update

ATA, Inc. (NASDAQ: ATAI) declared a special dividend of $6.00 per share.

The dividend will be payable on August 24, 2018, to stockholders of record on August 8, 2018, with an ex-dividend date of August 27, 2018.

The annual yield on the dividend is 132.5 percent.

Mr. Kevin Ma, ATA’s Chairman and CEO, stated, “We are pleased to announce our Board’s approval of this special cash dividend, which is conditioned upon the successful completion of the third closing of the Transaction. We anticipate consummating the final closing of the Transaction earlier than our original deadline of late third quarter 2018. We appreciate the ongoing support of our shareholders as ATA continues to evolve with the ever-changing education industry in China and are pleased to be in a position to return capital to our loyal shareholders with this special dividend. Our Company completed its IPO in January 2008 at a price of $9.50 per ADS. With the addition of this special dividend, we will have paid out US$7.42 per ADS back to shareholders while pursuing acquisition opportunities within the education sector.”

Transaction Update

As previously announced in a press release on February 6, 2018, ATA entered into a share purchase agreement (as amended, the “Share Purchase Agreement”) with a group of investors including two entities affiliated with funds managed by CDH Investments, a major Chinese alternative asset management firm based in Beijing; New Beauty Holdings Limited, a company controlled by Mr. Kevin Xiaofeng Ma, the Chairman and Chief Executive Officer of ATA; and four holding companies controlled by certain management members of ATA Online (collectively, the “Buyer Group”), with respect to the Transaction.

Under the terms of the Share Purchase Agreement, the Buyer Group agreed to acquire all of the outstanding equity interests of ATA Online, which was then held directly or indirectly by ATA, for a total consideration of US$200.0 million in cash. The US$200.0 million in cash consideration payable by the Buyer Group for ATA Online represents an 87.4% premium over ATA’s market capitalization (calculated based on the closing trading price of ATA’s ADSs on February 5, 2018). Mr. Ma paid a cash deposit in the amount of US$20.0 million to ATA as collateral and security for the payment obligations of the Buyer Group as agreed under the Share Purchase Agreement. The closing of the Transaction is expected to take place in three stages and is subject to the satisfaction of various conditions precedent in the Share Purchase Agreement. The first of the three closings was completed on April 4, 2018.

As announced in a press release on June 27, 2018, ATA, three of the four holding companies controlled by certain management members of ATA Online (the “Management Buyers”) assigned their rights and obligations under the Share Purchase Agreement to purchase a total of 15% of the equity interests in ATA Online (the “Assigned Shares”) to Zhuhai Lihonghuaying Equity Investment Partnership (LP) (the “LHHY Buyer”), a China-based entity principally engaged in private equity investments. The LHHY Buyer has purchased 15% of the equity interests in ATA Online in connection with the consummation of the Transaction’s second closing on June 27, 2018.

The Company currently expects that the third and final closing of the Transaction will be completed before the end of the third quarter of 2018, ahead of original schedule, but the Company cannot assure that all of the conditions for the third and final closing of the Transaction will be fulfilled or that the Transaction will ultimately be completed.

If the Transaction is not completed, ATA will continue to conduct the ATA Online-related business and may consider and evaluate other strategic opportunities. In such a circumstance, there is no assurance that ATA’s continuous operation of the ATA Online-related business or any alternative strategic opportunities will result in the same or greater value to shareholders as with the sale of ATA Online.

For a dividend history and other dividend-related data on ATA, Inc. (ATAI) click here.

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