GEMS to sell a near 30% stake to funds
Deal will see a group of funds pick up equity in the Dubai entity
Dubai: GEMS Education, the world’s largest provider of private K-12 education by revenue, is to sell a near 30 per cent stake to a cosortium.
The company has also launched a refinancing programme (expected to include loans and bonds), details of which will be announced later. Both transactions are anticipated to close by the end of this month.
The transaction will also see the exit by a consortium led by Fajr Capital Ltd., including Tactical Opportunities funds managed by Blackstone and Bahrain Mumtalakat Holding Company, the sovereign wealth fund of the Kingdom of Bahrain. They had acquired a minority stake in GEMS Education in 2014. (An existing minority investor Khazanah Nasional Berhad, a sovereign wealth fund of Malaysia, will retain its 3 per cent stake in the education services provider.)
The new investors include funds that are being advised by CVC Capital Partners. “Aided by our investors, the last five years have seen consistent and continued improvements across GEMS Education schools,” said Dino Varkey, CEO, GEMS Education. “We repaid our inaugural sukuk in November 2018 and are excited to re-engage with the international capital markets, including securing our inaugural credit ratings, as we launch our refinancing.
“Investment by the CVC Funds marks the third time we have successfully collaborated with global institutional investors. As we approach our 60th anniversary, we look forward to developing the company further.”
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As of end February, GEMS Education owned and operated 49 schools. Concurrently with the CVC Consortium’s transaction, it will assume ownership of a further 14 private schools in Europe, through the acquisition of Bellevue Education, a school group headquartered in the UK.
GEMS recently invested in a portfolio of 14 schools in Saudi Arabia and four schools in Egypt through joint ventures with Hassana, the Saudi Arabia Pension Fund, and EFG Hermes respectively.