GFH Financial acquires K-12 operator Britus Education's UAE, Saudi schools
Bahrain's GFH Financial acquires Britus Education, which has multiple schools in GCC
Dubai: Schools in the UAE, Saudi Arabia and other Gulf states continue to generate strong investor attraction, with the GFH Financial Group buying Britus Education. The latter, a K-12 schooling provider, has two educational facilities in the UAE, four in Saudi Arabia and one in Bahrain.
The Britus Education's overall school capacity in these markets adds up to 12,000 students, of which 8,000 are currently enrolled. (In Dubai, Britus owns Sheffield Private School.)
For the Britus deal, Bahrain-headquartered GFH inked the agreement with Saudi Education Fund, which is managed by EFG Hermes.
Britus has a market value of more than $200 million. "This investment is expected to reflect positively on the group’s financials and increase the returns for the group," said GFH Financial in a statement. (The company's stock is trading at Dh1.23 on DFM, down 0.8% at the end of the first hour of trading today.)
There has already been a handful of big-ticket deals in the local K-12 space, the most notable being the one for GEMS by a consortium led by the global investment firm Brookfield. Also, DFM-listed Taaleem signed up with the British school operator Harrow to bring its brand to the UAE.
"There will be lots more entries and exits in the UAE and Gulf education space," said an analyst. "All you need to do is look at the expanding resident base in these markets and see the investment potential."
New schools are being added across the board, with Abu Dhabi's Aldar Education being another prominent name. Aldar Education’s interests include the Cranleigh Abu Dhabi, Al Shohub Private School and Al Ain British Academy among others.
More deals for schools?
There is constant talk about more schools in the pipeline and which would draw in a new set of investors in the UAE or Saudi K-12 space. Analysts talk about the GEMS-Brookfield deal as setting a touchstone for what's possible in education sector investments. What this did was convince investors - local, regional and international - that new spaces could be created even in an extremely competitive landscape.
"Investment in the education sector in the UAE remains under-fulfilled - there are plenty of opportunities to monetize in the sector," said an analyst.
"And gain exits via through the capital markets. Education providers in the K-12 sector are gearing up for the IPO pipeline. Investors would do well to capitalize on such high growth sectors."
DFM-listed Taaleem recently came up with upbeat results for the latest financial period, and where it talks about adding more schools to what is an already busy network. While it has not given a schedule for the Harrow schools in the UAE, market watchers say these would create a new barometer for super-premium education in these markets.
"The same formula - of super-premium K-12 schooling - exists in Saudi Arabia and any of the other GCC markets," said an analyst. "You have all these multi-millionaires setting up permanent homes in the UAE and they will need access to schooling facilities for that sort of environment. This is where a Harrow would be a perfect fit."
Taaleem is trading at Dh4, while its 52-week high is at Dh4.21.