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Wed 10 Jul 2019 03:30 PM

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Consortium agrees to buy 30% stake in Dubai's GEMS Education

Funds advised by CVC Capital Partners have led a consortium to acquire minority stake in Dubai education provider

Consortium agrees to buy 30% stake in Dubai's GEMS Education

Funds advised by CVC Capital Partners have led a consortium which has agreed to acquire a significant minority stake in Dubai-based GEMS Education, the world’s largest provider of private K-12 education by revenue.

Upon completion of the transaction, the CVC Consortium will acquire about 30 percent of the company from existing shareholders.

Concurrently, GEMS Education has launched a refinancing programme - expected to include loans and bonds, details of which will be announced in due course. Both transactions are anticipated to close by the end of July.

The transaction sees the successful exit by a consortium led by Fajr Capital Limited including Tactical Opportunities funds managed by Blackstone and Bahrain Mumtalakat Holding Company, the sovereign wealth fund of Bahrain, which acquired a significant minority stake in GEMS Education in 2014.

Existing minority investor Khazanah Nasional Berhad, a sovereign wealth fund of Malaysia, which invested in January 2018, will retain its 3 percent stake in GEMS Education.

Dino Varkey, CEO, GEMS Education, said: “Investment by the CVC Funds marks the third time we have successfully collaborated with global institutional investors. As we approach our 60th anniversary, we look forward to developing the company further.”

Sunny Varkey, founder, GEMS Education, added: “We are delighted to welcome CVC as our new partners, as we continue our mission of raising the benchmark for quality education and shaping the future of learning for tomorrow.”

Jan Reinier Voûte, partner and co-head of CVC Strategic Opportunities, said: “We are excited to embark on our partnership with GEMS Education, the world’s leading education provider by revenue. GEMS is a perfect fit for our Strategic Opportunities strategy which is ideally positioned to support value creation in long term partnership investments. We look forward to supporting GEMS to deliver their vision of expanding their footprint.”

GEMS Education has grown from a single school started by a family of teachers in 1959 to become the world’s largest provider of private K-12 education by revenue.

As at the end of February, GEMS Education owned and operated 49 schools in the UAE and Qatar. With the CVC Consortium’s transaction, GEMS Education will assume ownership of a further 14 private schools in Europe, through the acquisition of Bellevue Education, a school group headquartered in the UK.

GEMS Education recently invested in a portfolio of 14 schools in Saudi Arabia and four schools in Egypt through joint ventures with Hassana, the Saudi Arabia Pension Fund, and EFG Hermes respectively.

The Varkey Family, in combination, will remain as the largest shareholders in GEMS Education once the transaction has completed.

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