CVC Capital Partners, a private equity firm managing $76 billion (Dh279.11bn) of assets, led a consortium that agreed to buy a 30 per cent stake in Dubai-based private school provider Gems Education from existing shareholders.
The transaction is expected to be completed by the end of this month, Gems Education said on Wednesday, without disclosing its value. The deal will see the exits of a consortium led by Fajr Capital including Tactical Opportunities funds managed by Blackstone, and Bahrain's sovereign wealth fund Mumtalakat Holding Company, which acquired a minority stake in Gems Education in 2014.
"Investment by the CVC funds marks the third time we have successfully collaborated with global institutional investors," said Dino Varkey, chief executive of Gems Education. "As we approach our 60th anniversary, we look forward to developing the company further. This is aligned with our vision of expanding the business into new markets."
In a joint statement, Iqbal Khan, chief executive of Fajr Capital, Andrea Valeri, senior managing director of Blackstone, and Mahmood Alkooheji, chief executive of Mumtalakat, said: “We are all very pleased with the progress Gems Education has made since our investment – with the company building 16 new schools, entering into new markets through organic and inorganic expansion, strengthening corporate governance, enhancing its capital structure, and improving overall academic excellence.”
Existing minority investor Khazanah Nasional Berhad, the sovereign wealth fund of Malaysia that invested in Gems Education in January 2018, will retain its 3 per cent stake in the company.
Gems has launched a refinancing programme, including loans and bonds, that is also expected to close by the end of this month, it said.
It repaid its debut sukuk in November 2018 and will re-engage with the international capital markets, including securing its first credit ratings, as it launches its refinancing, it said.
The shareholders of Gems Education have been advised by Credit Suisse, Emirates NBD and Morgan Stanley, JP Morgan and Bank of America Merrill Lynch. Allen & Overy acted as legal adviser.
The refinancing is being arranged by Goldman Sachs, Credit Suisse, HSBC and Citigroup and Milbank as to legal advice. Linklaters has provided legal advice to Gems Education in regard to the refinancing.
CVC was advised by UBS, Goldman Sachs and Freshfields. Fajr Capital, Blackstone, and Mumtalakat were also advised by Rothschild & Co and Gibson, Dunn & Crutcher.
Along with the CVC Consortium’s transaction, Gems Education will take ownership of a another 14 private schools in Europe, through the acquisition of UK-headquartered school group Bellevue Education, it said.
In May, Gems and Saudi investment firm Hassana Investment Company teamed up to buy the kingdom's biggest private school operator Ma’arif Education Group. Ma'arif runs national and international schools across the kingdom with more than 22,000 students enrolled.
Gems, the largest private school operator in the UAE and among the biggest education providers globally, owns and operates more than 50 schools with more than 124,000 students across the Middle East and North Africa.