NetDragon Websoft Holdings in Spin-off of Overseas Education Business

Cleary Gottlieb is representing Best Assistant Education Online Limited, a subsidiary of NetDragon Websoft Holdings Limited (NetDragon), in its agreement and plan of merger with Gravitas Education Holdings Inc. (GEHI), a NYSE-listed company.

Pursuant to the merger agreement, NetDragon will spin-off its overseas education business at a valuation of approximately $750 million, reverse merge GEHI for listing on the NYSE, and GEHI will divest its entire China business.

As part of the transaction, Best Assistant Education Online Limited will partly redeem the $150 million existing bonds issued to Ascendent Capital Partners, and revise the terms for the remaining bonds. At the same time, Ascendent Capital Partners will purchase $65 million convertible bonds issued by GEHI.

The transaction, which was announced on April 18, 2023, is expected to close in the third quarter of 2023. Upon completion, NetDragon will hold approximately 72.9% of the issued share capital of GEHI, which in turn will own 100% of the subsidiaries that operate the NetDragon overseas education business. GEHI will change its name to MYND.AI to reflect the new brand and the direction of the company to pursue the transformation of education with Artificial Intelligence (AI).

NetDragon is a China-based global leader in building internet communities, and its issued shares are listed on the Main Board of Hong Kong Stock Exchange (HKSE: 00777). NetDragon is principally engaged in online and mobile games development, including games design, programming and graphics and online and mobile games operation, education business, mobile solution, products and marketing business, and property project business.