Crimson Consulting this week completed the purchase of Unitutor, the move following its acquisition last year of Auckland University medical school prep service MedView.
Crimson, founded by two Auckland teenagers in February 2014, offers consultancy services to those applying for highly competitive slots in university in the United States and England. Last month it hired Max Key, the son of Prime Minister John Key, as a consultant.
Crimson managing director Jamie Beaton (19) said from the United States, where he is studying at Harvard University, that the acquisition of UniTutor would see its Otago University-focused undergraduate tutoring services rolled out nationwide.
UniTutor was founded in 2011 by Otago University graduate Samantha Berry. She said the opportunity to expand nationally was exciting. "It's been a long ride, but it's most definitely been worth it."
Beaton was unwilling to discuss a purchase price, but said UniTutor had revenues last year of $200,000 that he hoped would triple within 12 months, and the acquisition was part of a strategy focused on expanding quickly overseas.
He said the market was internationally very fragmented, making buying existing players an easier proposition. "The strategy at the moment is to go around and buy all these businesses for cheap multiples and quickly build up the brand of Crimson."
Beaton said he was in discussions with four similar business in Sydney, and hoped to make a play for one soon with plans to begin focusing on China in the middle of next year.
He said a recent round of capital raising pulled in $7.5 million, including $6 million from New York billionaire and retired hedge fund manger Julian Robertson, with the offering valued the business at $75 million.
Such a valuation would have Beaton - who was only able to legally become a director of Crimson last year after he turned 18 - knocking on the door of the National Business Review Rich List. Crimson is 49.48 per cent owned by Beaton with co-founder Sharndre Kushor holding a 14.37 per cent stake.
Beaton said Robertson's interest in the business was mirrored by his hedge fund Tiger Management, who were intrigued at the possibility of Crimson breaking into the $100 billion Chinese market for tutoring.
