Cluey Faces Integration and Funding Risks in Education Futures Group Buyout
Cluey Ltd has formalised its acquisition of Education Futures Group, the parent of Art of Smart, in a deal valued up to $6.5 million combining cash and shares. Completion is expected by January 2026, contingent on conditions and an ongoing entitlement offer.
- Binding share purchase agreement to acquire 100% of Education Futures Group
- Deal valued up to $6.5 million with part-cash, part-scrip and earn-out structure
- Completion targeted around 9 January 2026, subject to conditions precedent
- Entitlement Offer closing 10 December to partly fund acquisition and integration
- Vendor CEO Rowan Kunz to join Cluey as managing director with escrowed shares
Cluey Expands Edtech Footprint
Cluey Ltd (ASX, CLU), a rising player in the Australian education technology sector, has taken a significant step forward by entering into a binding share purchase agreement to acquire Education Futures Group Pty Ltd (EFG), the holding company of the Art of Smart group. This acquisition, announced on 8 December 2025, marks a strategic expansion for Cluey, aiming to broaden its offerings and consolidate its position in the competitive Edtech market.
The deal replaces an earlier terms sheet announced in November and sets the maximum consideration at $6.5 million. This amount is structured as a combination of cash and Cluey shares, with an earn-out component linked to the future financial performance of the Art of Smart business. The acquisition is expected to complete around 9 January 2026, pending the satisfaction of customary conditions precedent.
Financial Structure and Funding
The purchase price is split into two tranches, an initial payment of approximately $3 million, partly in cash and partly in shares issued at a 30-day volume weighted average price, and a second tranche earn-out payment contingent on the Art of Smart group's EBITDA performance for the fiscal year ending June 2027. This earn-out mechanism aligns vendor incentives with Cluey's long-term growth objectives.
To support the cash component and integration costs, Cluey is conducting an Entitlement Offer, which closes on 10 December 2025. The funds raised will be crucial in facilitating a smooth transition and ensuring operational synergies post-acquisition.
Leadership and Integration Plans
Rowan Kunz, the CEO and founder of Art of Smart, will join Cluey as managing director of the newly acquired business unit. His continued leadership is secured through an executive employment agreement that includes standard non-compete and confidentiality provisions. Notably, shares issued to the vendor are subject to escrow arrangements lasting up to 36 months, designed to safeguard Cluey's interests and ensure ongoing commitment.
This integration signals Cluey's intent to leverage Art of Smart's established brand and expertise in delivering personalised education services, complementing Cluey's existing offerings in mathematics, English, chemistry, and test preparation for students from year 2 through 12.
Market Implications and Next Steps
While the acquisition promises to enhance Cluey's market position, investors should note the conditional nature of completion and the financial uncertainties tied to the earn-out payments. The company has committed to keeping the market informed on the progress of both the Entitlement Offer and the acquisition process.
As Cluey integrates Education Futures Group, the coming months will be critical in realising anticipated synergies and validating the strategic rationale behind this acquisition.
Bottom Line?
Cluey's acquisition of Education Futures Group sets the stage for growth but hinges on future performance and successful integration.
Questions in the middle?
- Will the Entitlement Offer raise sufficient funds to fully support the acquisition and integration?
- How will the earn-out structure impact Cluey's financials if Art of Smart underperforms or exceeds expectations?
- What are the key risks associated with integrating Art of Smart's operations into Cluey's existing platform?
