Dubai school operator GEMS eyes stake sale at $6 billion value

The owners of GEMS Education, one of the world’s largest private school operators, are exploring options including the sale of a controlling stake in the business, according to people familiar with the matter.

Buyout firm CVC Capital Partners and founder Sunny Varkey may sell their stakes in the Dubai-based school operator in a deal that could value the business at as much as $6 billion, the people said, asking not to be identified as the matter is private.

Middle Eastern sovereign wealth funds and some large financial sponsors are looking at the business currently, the people said. The owners are working with Morgan Stanley and Goldman Sachs Group Inc. to identify buyers, the people said.

The owners are also weighing an initial public offering as a potential exit route though the preferred option is a sale for now, the people said. Deliberations are ongoing and there’s no certainty that CVC and Varkey will decide to proceed with the stake sales.

Representative for GEMS, CVC and Morgan Stanley declined to comment. A spokesperson for Goldman Sachs couldn’t immediately be reached for comment.

Education assets

Education assets have drawn strong interest from financial investors keen to expand in the sector. Infrastructure investor Stonepeak Partners agreed to invest 1 billion euros ($960 million) in UK private schools operator Inspired Education this year.

GEMS, which traces its roots back about 60 years, operates more than 60 schools teaching over 130,000 students across the Middle East and North Africa. It also has schools in Asia, Europe and North America, according to its website. CVC bought its stake in the company in 2019.

Varkey had held talks to sell some of his stake in GEMS in 2020, but struggled to find buyers amid the pandemic, with schools and universities shutting down as part of global lockdowns. The firm had also considered a stock market listing in 2019.