GEMS Education founder Sunny Varkey says the company is exploring multiple options to bring in new investors, including the sale of an equity stake or an IPO in the middle of 2023.
In an exclusive interview with Arabian Business, Varkey – who owns the majority of the company – said the private equity firm CVC was looking to exit its stake, believed to be slightly over 30 percent.
“We have an agreement with CVC, and we are now working to deliver then their exit which was always planned for. That’s what this is about. We are fortunate in that there have been several suitors,” he said, adding that wealth fund ADQ and real estate developer Aldar “were among many groups across the world showing interest.”
It is understood that any bid is likely to put a valuation on the group at over $6bn. Under Varkey’s leadership, GEMS Education has grown to become the largest non-governmental operator of private K-12 schools in the world, teaching 140,000 students from 175 countries.
Varkey said: “We are working with Morgan Stanley and Goldman Sachs and in the first phase and they are looking at several suitors. But we prefer long-term partners. Education is such a key part of the social fabric of any country, and an instrument of progress in any society. So ideally, we would tie up with a sovereign wealth fund, or infrastructure fund, or even a pension fund.”
He added: “As part of this process you always have to take a parallel approach. Can you get the right private placement, and if you don’t do that can you do an IPO? If we don’t get the right partner, yes, we will do IPO around the middle of 2023.”
Varkey said he had no current plans to relinquish a majority stake in the business but would look at all the options. “I have always believed in starting a company, developing it and moving on to something new. That’s what I did when I ran a healthcare business. However, with education, it has always been a long-term passion since I took over the company in 1980. This is in my blood. GEMS Education and the Varkey name go hand in hand. Parents trust us, they trust the name, and we have no plans to change our line of business. But we are open to talks as we enter this new phase and see what the options are.”
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