US private equity firm said to eye stake in Dubai's GEMS

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Dino Varkey, group chief operating officer at GEMS. (Photo for illustrative purposes only)

Dino Varkey, group chief operating officer at GEMS. (Photo for illustrative purposes only)

A New York-based private equity firm is reportedly close to a deal to acquire a minority stake in Dubai's GEMS Education.

According to Bloomberg, Blackstone Group LP is eyeing its first investment in the Middle East.

It cited sources close to the deal as saying that Blackstone has teamed up with Fajr Capital to invest in the world’s biggest privately held schools operator through its Blackstone Tactical Opportunities unit.

A formal agreement to buy 20 percent of the company may be reached in the next couple of weeks, Bloomberg said, adding that the deal may value the stake at about $350 million.

GEMS, which operates more than 100 schools across 14 countries, may sell as much as 25 percent of the company to raise up to $500 million, chief operating officer Dino Sunny Varkey said last year.

GEMS Education said in January that it plans to build about six schools a year to take advantage of the UAE's booming private education industry.

Along with healthcare, education is viewed as one of the fastest-expanding industries in the Middle Eastas growing populations and burgeoning wealth create demand for high-quality services previously in short supply locally.

Expatriates account for the vast majority of the UAE population, with demand for schooling rising alongside a gradual shift from short-term residents chasing tax-free wages to workers settling and bringing up families in the region.

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