NEWS
Exclusives
Canadian pension fund and L’Oréal family office acquire Galileo in €2.2bn deal The Canada Pension Plan Investment Board (CPPIB), the investment arm of Canada’s largest pension fund, bought a stake in private university operator Galileo Global Education in a deal valued at more than ¤2.2 billion, EducationInvestor Global exclusively revealed. This publication learnt that CPPIB had taken a 40% stake in Galileo, fending off competition from suitors that included private equity houses KKR, CVC Capital Partners and BC Partners, as well as a chorus of family offices and sovereign wealth funds. Tethys Investments, a private equity fund controlled by France’s
Bettencourt family, which owns cosmetics giant L’Oréal, upped its existing stake in Galileo from 20% to 40%, one source told this publication. A long-term fund overseen by Europe’s Montagu Private Equity took the remaining 20% stake, it is understood. Goldman Sachs and Rothschild, the investment banks running the auction of Galileo on behalf of Providence, had initially targeted a price of around ¤2.5 billion – around 20-times EBITDA – for the business. However, a source told this publication that the deal was ultimately valued at 16-times Galileo’s earnings for the past 12
months, which totalled around ¤140 million, indicating a price tag of between ¤2.2 billion and ¤2.3 billion. With 42 universities worldwide that cater to more than 100,000 students, Galileo is Europe’s largest for-profit university operator. Its portfolio of institutions includes the Paris School of Business, Macromedia University in Germany and Instituto Marangoni, an Italian fashion school. Many of Galileo’s universities specialise in arts and creative disciplines. Instituto Marangoni has branch campuses in China, India and the US. Last October, Galileo launched
a ¤700 million loan to refinance existing debt, bankroll acquisitions and pay shareholders a ¤70 million dividend – the third dividend paid to Providence in two years. CPPIB co-owns global school network Nord Anglia, which it acquired in 2017 alongside Baring Private Equity Asia in a $4.3 billion take-private deal. CPPIB could not be reached for comment. Tethys could not be reached for comment. Providence did not immediately respond to a request for comment. Rothschild did not immediately respond to a request for comment.
French nursery provider to expand UK footprint French nursery operator Grandir is set to acquire Nurture Day Nurseries, a pair of London sites, in a deal that will expand its UK footprint, EducationInvestor Global exclusively revealed. This publication learnt that Grandir, which owns France’s Les Petit Chaperons Rouge and UK-based operator Kiddi Caru, would close the acquisition of Nurture in the second quarter.
Nurture operates two settings in southwest London that generate annual revenues of £1.6 million and EBITDA of £390,000. It was privately owned by its director, Manisha Patel. The value of the transaction is unknown. Following the deal, Grandir will own around 40 British nurseries. The transaction is the latest link in a chain of buyouts of UK-based nursery businesses by French operators.
Last February, France’s private equity-backed La Maison Bleue, one of the country’s largest early years providers, acquired The Old Station Nursery group in the UK. Wielding La Maison Bleue’s checkbook, The Old Station Group has since acquired Premier Nurseries’ two sites in Oxford, and Sandhills Nurseries, a group of six settings near Birmingham and Lincolnshire. Grandir entered the UK market in early 2017 through its acquisition of
Magic Nurseries, which at the time catered to more than 1,000 children through its 16 settings. Later that year, Grandir bought Kiddi Caru, which at the time had 20 nurseries in central and southern England that provided more than 2,100 places. According to CrunchBook, Grandir is bankrolled by private equity capital. Grandir could not be reached for comment.
Private school hands mandate to UK broker Brookes Education Group, an international network of seven private schools, appointed advisors from Redwoods Dowling Kerr to explore options around a potential sale of one of its schools, EducationInvestor Global exclusively revealed. This publication learnt that Brookes’ owners, which according to corporate filings are the firm’s five directors, handed the UK-based broker an exclusive mandate to scope out potential investors for
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its UK school, which is situated in Suffolk. A source familiar with the process said that although the school is “seeking investment first”, the process could culminate in an outright sale . Brookes also has six other sites in Canada, Russia, India, South Korea and the US. According to filings with Companies House, Brookes’ shareholders’ funds stood at minus £2.7 million in 2018, down from
minus £1.8 million a year prior. This is because the organisation, at the time, had current assets of just over £88,000, but owed creditors more than £2.9 million within a year of 31 August, 2018. But although the business is loss-making, one source familiar with the asset told this publication: “It could represent the chance to acquire a sizeable freehold with significant scope for financial growth and future development.” The source added that the
schools group could be attractive to a strategic buyer that “knows what they’re doing and already has a flow of international students”. According to its website, Brookes caters to more than 1,400 students. The group boasts an average student-to-staff ratio of three to one, and of “100% university offers to graduates”. A spokesperson for Redwoods Dowling Kerr declined to comment. Brookes could not be reached for comment.
EducationInvestor Global • April/May 2020
