Hong-Kong based international schools operator Nord Anglia Education is set to be taken private again in a $4.3bn deal with Canada Pension Plan Investment Board and Baring Private Equity Asia.
The buyout comes at a time of rapid expansion for Nord Anglia, which recently announced the acquisition of two schools in Europe and the Middle East, as well as its planned expansion into Ireland next year.
“We have high conviction that Nord Anglia’s future is even more promising than its past”
It has been majority-owned by Baring Private Equity Asia since 2008, and was listed on the New York Stock Exchange in a $300m IPO in 2014.
However, Baring remained majority shareholder, and its affiliated funds currently control a 67% stake in the company.
“After nine years, we have developed a thorough understanding of the business and have high conviction that Nord Anglia’s future is even more promising than its past,” commented Jean Eric Salata, Baring’s CEO and founding partner.
The deal is CPPIC’s first direct equity investment in private education and will deliver “strong, sustainable returns to the Canada Pension Plan Fund over the long term”, according to Deborah Orida, its managing director and head of private equity for Asia.
“The company, backed by a strong management team, is well positioned to benefit from the rising demand for high-quality education in the kindergarten to grade 12 category globally, has demonstrated strong financial performance, delivers stable cash flows and provides a platform for future growth in this sector,” Orida added.
Founded in 1972, Nord Anglia teaches some 37,000 students at 43 schools in China, Europe, the Middle East, North America and Southeast Asia.
The company is currently in the process of expanding its international portfolio of schools.
It added two as yet unnamed schools in Europe and the Middle East to its stable in March, enrolling some 4,400 students, in two separate deals worth a combined $147m.
Further acquisitions are likely in the near future, Nord Anglia’s CEO, Andrew Fitzmaurice, indicated at the time: “Nord Anglia Education continues to have an active pipeline of excellent acquisition opportunities to further expand our global network.”
“Nord Anglia Education continues to have an active pipeline of excellent acquisition opportunities”
The group also announced its expansion into Ireland in the same month, with an 800-seat school in Dublin set to open in September next year.
“We are delighted to announce the development of our first school in Ireland,” said Fitzmaurice.
“As one of the fastest growing economies in Europe, Ireland is an increasingly attractive destination for families, fuelling demand for international education from both expatriate and local parents alike.”
The group will also open an additional campus for its British School of Guangzhou in 2020, following what Fitzmaurice called “strong demand”.
Nord Anglia’s privatisation deal has been approved by its board of directors and is awaiting authorisation by the company’s shareholders.
Premier Education, a fund controlled by Baring Asia which holds a 67% stake in the company, has already committed to voting in favour of the deal, it said in a statement.
The agreement is also subject to a ‘go-shop period’, in which Nord Anglia can solicit and even enter into negotiations with other potential buyers.
The deal is expected to close by the end of Nord Anglia’s fiscal year on August 31.
