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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.

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.

French nursery provider to expand UK footprint

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.

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.

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.

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 its UK school, which is situated in Suffolk.

Private school hands mandate to UK broker

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.

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.

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.

Exclusives

London-based buyout house acquires Learning Curve

Agilitas Private Equity, a Londonbased buyout house, acquired UK apprenticeship provider Learning Curve for around £100 million, EducationInvestor Global exclusively revealed, wrapping up an auction process unveiled by this publication last year.

This publication learnt that MML Capital Partners – Learning Curve’s previous private equity owner, which took a 50% stake in the business in 2015 – exited the company following the close of a successful sale marshalled by Clearwater International.

It was understood that Agilitas, which has invested in several UKand Nordic-based businesses, would pay between nine- and 10-times Learning Curve’s EBITDA, which stood at £11 million in 2019, for a controlling stake in the organisation.

It was unclear what size stake Learning Curve’s directors – Brenda McLeish and Jon Cummins – would retain.

The deal came just days after Learning Curve announced its acquisition of London-based hair and beauty training provider the London Hairdressing Apprenticeship Academy and its subsidiary, London Beauty Training Academy.

Agilitas’ acquisition of Learning Curve marked the private equity group’s first foray into the education sector.

Its portfolio includes Exemplar Health Care, Hydro International and Teracom Denmark, according to its website.

Founded in 2004, Learning Curve caters to more than 100,000

Brenda McLeish, Learning Curve

students a year through its range of apprenticeship programmes, academies and government-funded training schemes.

According to its website, Learning Curve services more than 4,500 employers a year, assisting them with the development of workplace-training schemes, vocational qualifications and long-term apprenticeships.

The investment arm of Canadian pension fund OMERS and French infrastructure fund Antin were among a handful of suitors vying for ownership of Babilou, France’s largest daycare operator, EducationInvestor Global exclusively revealed.

Three sources familiar with the auction of Babilou, which could fetch several billion euros, told this publication that OMERS Private Equity, the investment division of Ontario’s government pension fund, and Antin Infrastructure Partners, a private equity firm that invests in infrastructure companies, were closing in on the nursery operator.

Two sources said that Partners Group is also still “in” the process – meaning Babilou’s shareholders may have been considering a bid from the $91 billion Swiss private equity behemoth.

One source said that Blackstone, the world’s largest buyout house, had also shown interest in acquiring Babilou – though this information could not be corroborated.

Canadian pension fund and buyout houses vie for ownership of Babilou

JP Morgan, the investment bank spearheading the sale of Babilou, had fielded interest from other investors including US-listed nursery operator Bright Horizons and GIC, a Singaporean sovereign wealth fund, sources said. However, both parties were no longer pursuing an acquisition, it was understood.

While the values of bids tabled by OMERS, Antin and Partners Group are unclear, this publication reported in January that auctioneers were targeting a price equivalent to around 20-times Babilou’s forecasted earnings for this year of ¤100 million – or roughly ¤2 billion.

But a source told this publication in January that this figure was “extremely high”, and suggested that a double-digit price-to-earnings multiple between 14 and 18 was “more realistic”.

One source said that the “price was closer to ¤1.5 billion”.

Directly funded by the UK’s Skills Funding Agency and Education Funding Agency, Learning Curve is “the largest subcontractor partner to FE [further education] colleges of our type”, the firm’s website states.

According to its website, Agilitas “focuses on making transformational investments in defensible businesses”.

A representative for Learning Curve declined to comment on the details of the transaction.

Clearwater International could not be reached for comment at the time of publication.

Agilitas could not be reached for comment at the time of publication.

MML Capital Partners could not be reached for comment at the time of publication.

In any event, a successful sale should net more than ¤1 billion for Babilou’s shareholders.

No final accord on a deal has been reached and talks over the acquisition may yet fall apart. It is unclear when – if at all – a sale of Babilou will be finalised.

Babilou’s 2020 revenues, which factor in its recent acquisitions, were forecasted to reach around ¤600 million. However, revenue and earnings forecasts do not account for any potential losses caused by the outbreak of covid-19, the new deadly coronavirus that has spread across the world and prompted mass nationwide self-isolation measures and cross-continental travel bans. At the time of publication, all nurseries, schools and universities in France were closed by order of government in a bid to stem the spread of the virus.

One source suggested that JP Morgan may “have to put the process on hold soon” should financials need to be re-evaluated in light Covid-19- related losses.

Babilou operates more than 500 nurseries that collectively cater to more than 20,000 children in countries including France, Germany, Belgium, Dubai, Switzerland, India and, most recently, China.

Babilou is majority-owned by its founders the Carle family, which established the business in Paris in 2003. Minority investors include international buyout house TA Associates; Cobepa, a Belgian private equity firm; the private equity unit of French bank Société Générale; and Raise, a French private equity fund.

A spokesperson for OMERS declined to comment.

A spokesperson for Partners Group declined to comment.

A spokesperson for JP Morgan declined to comment.

Antin had not responded to a request for comment at the time of publication.

Exclusives

Rhône Capital abandons sale of Global Knowledge

The sale of Global Knowledge, a private equity-owned European provider of technology and corporate skills training, was abandoned after an auction process failed to drum up interest, EducationInvestor Global exclusively revealed.

This publication learnt that Cavendish Corporate Finance, the sell-side M&A advisory firm mandated to oversee the sale of Global Knowledge on behalf of its owner, Rhône Capital, pulled the business from the market after two rounds of bidding failed to solicit serious offers.

Sources said that Cavendish Corporate Finance approached a raft of suitors late last year and once again in January – but both times failed to secure a buyer for the business.

“There just wasn’t enough appetite,” one source said.

It was understood that the decision to ditch the sale of Global Knowledge was made prior to the outbreak of Covid-19, which has brought industries to their knees as governments worldwide continue to impose stringent self-isolation measures in an attempt to curb the spread of the deadly coronavirus.

It was unclear whether Rhône Capital and Cavendish Corporate Finance would look to relaunch the auction.

A prospectus, which put Global Knowledge’s EBITDA at around ¤13 million, was initially circulated to prospective bidders in the fourth quarter of last year.

The business was set to be broken up, with New York-based Rhône Capital retaining ownership of the US division, while the European arm was to be carved out and offloaded.

Catering to more than 200,000 IT and business professionals each year, Global Knowledge is one of Europe’s largest corporate training providers.

Global Knowledge delivers more than one million individual courses a year, 80% of which are hosted online, in areas such as coding, blockchain technology, application development and cyber-security.

It is acknowledged as a competitor of the UK’s QA, the ITtraining provider owned by CVC Capital Partners, Europe’s largest private equity firm,

Global Knowledge has longstanding partnerships with technology giants Microsoft, Cisco and VMware.

Last November, Global Knowledge acquired Hollandheadquartered HODAC Training.

The firm encompasses Lerio, which specialises in Microsoft applications, and GK Noord, a longtime reseller of Global Knowledge courses in the northern Netherlands.

It is not uncommon for organisations to acquire thirdparty sellers of their products in order to quickly gain market share in locations where they historically did not have the capacity to set up shop themselves.

In 2017, Global Knowledge acquired Ottawa-based ctc TrainCanada, and in doing so gained presence in 10 Canadian cities through a network of training centres.

Rhône Capital acquired Global Knowledge in 2014, when its former owner MidOcean Partners, another New York-based buyout fund, exited the holding.

Rhône Capital, which has offices in London and New York, has a diverse portfolio spanning investments and exits in industries including business services, chemicals, consumer products, food and transportation.

Previous investments include

Forfar Education, a privately owned school operator based in the UK, acquired two schools – The Gleddings Preparatory School in Halifax and Cameron House School in Chelsea – EducationInvestor Global exclusively revealed.

This publication learnt that Forfar Education, which is bankrolled by private City investors and headed up by chief executive John Forsyth, acquired Gleddings prep in December and Cameron House more recently.

Forfar Education acquires two UK private schools

When contacted by this publication, Forsyth said he was “delighted to have acquired two schools that gel so well with the ethos of Forfar”, but declined to give further details relating to the transactions. The values of the deals are unknown.

Forfar Education also owns Brackenfield School in Harrogate. The group’s purchase of Cameron House marks its first in London. Forfar Education also operates – but does not own – several schools in Asia.

confectionary manufacturer Nestlé, cosmetics company Elizabeth Arden and aviation firm VistaJet.

Rhône Capital is part-owned Eurazeo, a ¤17 billion Franceheadquartered private equity group.

Eurazeo acquired a 30% stake in Rhône Capital in 2018 for $270 million, funded by $100 million in cash and two million Eurazeo shares.

Under the agreement, Eurazeo has three representatives on Rhône Capital’s board and Rhône Capital has representation through a “nonvoting observer” on Eurazeo’s supervisory board, according to a press release.

Cavendish Corporate Finance did not respond to a request for comment.

Rhône Capital had not responded to a request for comment at the time of publication.

Cameron House, described on its website as “a homely and heartlifting sight amid the bustle of Chelsea”, records annual revenues of around £560,000. Accountancy firm BDO brought the school to market on behalf of its former owners last August.

One source said that Cameron House’s student numbers had been in decline – a claim on which Forsyth declined to comment.

As of 31 August, 2019, The Gleddings School – which is coeducational and has “around 200 pupils”, according to its website – had net assets totalling £706,664 – up from £664,504 in 2018 – according to corporate filings.

Exclusives

Corndel to hit market in Q4

The owners of Corndel, a fast-growing apprenticeship provider that serves some of the UK’s largest companies, drafted in advisors from Lincoln International to explore options around a sale, EducationInvestor Global exclusively revealed.

This publication learnt that the directors of Corndel, which since inception in 2016 has won contracts from blue chip organisations including BP, Legal & General and UBS, instructed corporate financiers from the investment bank to launch an auction in the fourth quarter of this year.

In the meantime, Corndel will look to boost profitability by up to 40%, one source said, while Lincoln International will prepare the business for sale and meet with prospective buyers to warm up investors’ appetites.

According to corporate filings, during the six months ending 30 June, 2019, Corndel recorded pretax profits of £259,000.

However, Corndel’s annual revenues are expected to total £24 million this year, and its profit margin is expected to widen as it transitions from a start-up enterprise to a business that caters to more than 3,500 learners a year.

Corndel was launched in response to the introduction of the UK apprenticeship levy, which since 2017 has forced large organisations to set aside a percentage of their payroll value to fund workplace training through apprenticeship schemes.

Corndel primarily offers highlevel apprenticeships and diplomas that are typically utilised by large organisations to upskill members of their management teams. It counts several FTSE 100 organisations among its key clients.

This publication understands that Corndel’s management team, which is led by chief executive Sean Williams, is seeking a funder that can help the business reach £100 million in revenues over the next four years by bolstering its apprenticeships, commercial training and executive coaching offerings in the UK and internationally.

The first phase of Corndel’s growth, between 2016 and now, was funded by around 35 individual investors who provided the firm with capital through the UK’s enterprise investment scheme, a tax-efficient investment initiative that channels funds from private investors into fledgling firms.

Corndel is likely to draw interest from mid-market private equity houses, which are attracted to the UK apprenticeship market because of the relatively high levels of fragmentation it showcases and the role its participants play in improving productivity levels – an initiative that has strong cross-party support in Whitehall.

Corndel could also catch the eyes of corporate buyers, one source said.

One such suitor could be US-based publisher Wiley, which stepped into the UK training market in January with its $129 million purchase of technology training provider mthree from ECI Partners.

One source, however, questioned Corndel’s “exposure” to changes to the apprenticeship levy – specifically around the ways in which levy funds can be deployed – because of its acute focus on providing management training, as opposed to low-level apprenticeships for school leavers. Lobbying efforts to prevent levy funds being used to fund socalled MBA-style apprenticeships have crystallised (see page 17).

A chorus of private equity houses including KKR and CapVest tabled preliminary bids for Lifetime Training, the UKbased apprenticeship provider owned by Silverfleet Capital, EducationInvestor Global exclusively revealed.

This publication learnt that Houlihan Lokey, the investment bank overseeing the auction of Lifetime Training on behalf of its private equity parent, collected first-round bids for the business, with price expectations currently sitting at around £200 million.

London-headquartered buyout groups Bowmark Capital and Charterhouse Capital Partners were also understood to have placed bids.

KKR among host of private equity groups placing preliminary bids for Lifetime Training

According to one source, Lifetime Training was being marketed as having EBITDA of around £20 million – suggesting a price-to-earnings multiple of around 10 was being targeted by auctioneers.

KKR, one of the world’s largest private equity groups, is understood to have filed a bid through its $1.3 billion Global Impact Fund.

According to a press release, the fund is “dedicated to investment opportunities in companies whose core business models provide commercial solutions to an environmental or social challenge”.

Silverfleet Capital acquired Lifetime Training from rival mid-market private equity group Sovereign Capital in 2016 for between £115 million and £120 million. At the time, Lifetime Training recorded EBITDA of around £11 million.

If such warnings are acted on and rules are revised, there is a risk that Corndel’s revenues could take a hit as levy-paying companies could be forced to reallocate funds to lowerlevel training initiatives, the source said.

A spokesperson for Corndel said: “We are seeking a funding partner that shares Corndel’s vision and values so that we can deliver yet more transformative professional learning to more learners and more businesses.

“We have appointed Lincoln to help us in that search.”

A spokesperson for Lincoln International confirmed its mandate, but declined to comment further.

Silverfleet Capital drafted in bankers from Houlihan Lokey last July to explore options around a sale of the business, as reported exclusively by this publication.

News of the first bidding round came hot on the heels of Agilitas Private Equity’s £100 million purchase of Learning Curve, another UK-based apprenticeship provider, reported exclusively by this publication.

Founded in 1995, Lifetime Training skills some 20,000 people a year through its level two and three apprenticeship schemes. It was named apprenticeship training provider of the year in 2019 by RateMyApprenticeship.

According to its website, Lifetime Training counts among its corporate clients organisations such as Pret A Manger, McDonald’s and Pure Gym.

Houlihan Lokey declined to comment on its own position and on behalf of its client, Silverfleet Capital.

Spokespeople for KKR and CapVest all declined to comment.

Bowmark Capital and Charterhouse Capital Partners had not responded to requests for comment at the time of publication.