Dubai's GEMS among bidders for Saudi school operator

GEMS Education, the Dubai school operator backed by Brookfield Asset Management, is among parties that have submitted initial bids for Saudi Arabia’s Ajialuna Educational Co., according to people familiar with the matter.

Several local investors have also made non-binding offers for the Riyadh-based school company, the people said. Sulaiman Alrajhi Holding, which has majority ownership of Ajialuna, is seeking to sell its entire stake, the people said. Details on the other bidders and the potential deal value weren’t immediately available.

Deliberations are ongoing and bidders may choose to withdraw, while the owners could decide to hold on to the business longer, the people said, asking not to be identified as the matter is private.

Representatives for Brookfield and GEMS Education declined to comment, while Ajialuna didn’t respond to requests for comment. The transaction could close as early as November, though the timeline remains subject to change.

Founded in 2008, Ajialuna serves more than 14,000 students across Saudi Arabia through a mix of private and international schools. Its brands include Al Forsan International Schools, with campuses in Riyadh, Al-Khobar, and a newly opened site in Jeddah. The schools offer international curricula from kindergarten to high school, serving both Saudi families and a growing number of expatiates.

As the kingdom diversifies its economy and welcomes more expatiates under Vision 2030, demand for quality education is rising. With a young, growing population and more international residents, the private education sector has plenty of room to expand, according to global advisory firm Oxford Business Group.

Since foreign ownership rules were eased in 2017, international and regional school brands have been opening branches across Saudi Arabia. At the same time, more Saudi students are enrolling in international schools as part of government efforts to improve access and close the skills gap.

GEMS was founded by an Indian family some six decades ago and has since morphed into one of the world’s largest private school operators. Last year, a consortium led by Brookfield, alongside other investors, committed $2 billion to GEMS in one of the region’s largest private equity deals.

Today, GEMS runs dozens of schools across the Middle East. The group is also moving into India via a partnership with the Adani Group, which plans to build 20 schools over the next three years.

Brookfield has been one of the Middle East’s most active and largest institutional investors. It expanded into Saudi Arabia a few years ago and has since grown its presence. The Brookfield led consortium that invested in GEMS included Gulf Islamic Investments, Marathon Asset Management and the State Oil Fund of Azerbaijan.