EducationInvestor July/August 2020

EducationInvestor Global July/August 2020 vol 12 • no 5

essential reading for education companies worldwide

Strength in numbers Education groups will capitalise on Covid-induced consolidation

Fever pitch

Bridging the divide

Head start

How Inspired’s Nsouli closed a €350m deal while battling coronavirus

Private providers are patching holes in public provision

Tips on scaling a start-up from a leading founder-cum-CEO

infrastructure

• ICT • outsourcing • academies • schools • colleges • nurseries • universities • policy

CONTENTS

global

news Exclusives

4-5

Policy

6

Early years

7

K12

9

Higher education

10-11

Further education & skills training 12-13 Ed tech & services

14-15

Philanthropy

16

News in brief

17

Herd immunity 18 Valuations of private school assets are set to recalibrate due to the coronavirus conundrum. But attrition will not be spread evenly across the sector, as school groups will emerge from the pandemic stronger than ever, often at the expense of stand-alone institutions, writes Josh O’Neill Fever pitch 22 Nadim Nsouli, chief executive and founder of global premium school group Inspired Education, contracted Covid-19 as he was closing the biggest deal of his company’s history. He talks to Josh O’Neill about his close encounter with the coronavirus, its impact on the company, and why there is strength in numbers amid the pandemic For the many, not the few 26 Ashwin Assomull, partner, L.E.K. Consulting, dissects his organisation’s latest report, commissioned by Jacobs Foundation, which examines how independent operators across the global K12 market are patching gaps in public provision Tips for start-up success 28 Kate Shand, Business Women in Education founding member and chief executive of Enjoy Education, which she founded, offers her experience of scaling a start-up and explains why challenging the status quo is imperative to growing a business

Herd immunity

e-learning 32

Europe Distant future 32 Victoria Giles, corporate finance director at Grant Thornton UK, sets out the driving forces behind consolidation in the e-learning market, for which the Covid-19 pandemic has been a boon 10 minutes with...

36 RJD Partners Private equity firm RJD Partners recently bankrolled the management buyout of Improve International, a provider of training to the veterinary sector. Partner Frank Bulman discusses the deal and the impact of Covid-19 on his fund’s other education and training assets​

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finance Deals The month’s latest transactions

38

Results The month’s company announcements

43

executive moves Executive moves

Nadim Nsouli

2

22

Kate Shand

48

28

EducationInvestor Global • July/August 2020

UP FRONT MANAGING DIRECTOR Vernon Baxter – +44 (0) 20 7104 2001 vernon.baxter@investorpublishing.co.uk EDITOR Josh O’Neill – +44 (0) 20 7451 7069 josh.o’neill@investorpublishing.co.uk DEPUTY EDITOR Simone Rensch – +44 (0) 20 7451 7061 simone.rensch@investorpublishing.co.uk REPORTER AND SUBEDITOR Charles Wheeldon – +44 (0) 20 3762 2556 charles.wheeldon@investorpublishing.co.uk SALES MANAGER Carlo Menezes – +44 (0) 20 7104 2002 carlo.menezes@investorpublishing.co.uk SALES MANAGER Grace Mackintosh – +44 (0) 20 7451 7067 grace.mackintosh@investorpublishing.co.uk DELEGATE SALES & ADVERTISING EXECUTIVE Sohail Iqbal – +44 (0) 33 0052 6190 sohail.iqbal@investorpublishing.co.uk DELEGATE SALES & ADVERTISING EXECUTIVE Shakil Ahmed – +44 (0) 20 7104 2005 shakil.ahmed@investorpublishing.co.uk SENIOR EVENTS MANAGER Nicola Jones – +44 (0) 20 3746 2613 nicola.jones@investorpublishing.co.uk PRODUCTION MANAGER Jeremy Harvey – +44 (0) 20 7451 7053 jeremy.harvey@investorpublishing.co.uk DESIGN & PRODUCTION EXECUTIVE Craig Williams – +44 (0) 20 3762 2254 craig.williams@investorpublishing.co.uk PUBLISHER Harry Hyman FOLLOW US ON TWITTER @EduInvestor

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EducationInvestor Global • July/August 2020

Buy now, pay later Deals are once again flowing in the education sector and big transactions are making it over the line. But at what cost?

A

cross the global education arena, brightly coloured stickers offering savings of varying degrees are being affixed to companies in play.

Discounts depend on the state of vendors’ finances and, of course, the impact of Covid-19 on the asset that’s up for sale. To measure this, the Masters of the Universe conjured up EBITDAC: earnings before interest, tax, depreciation, amortisation and – you guessed it – coronavirus.

Whether this novel instrument provides fiscal clarity or is merely an attempt to put a sanguine spin on a dire situation is up for debate. Some investors warn it could facilitate aggressive borrowing amid a deep economic recession – a corporate cocktail leaving a nasty hangover.

Financial massaging will not relieve the pains of the many education providers that have collapsed into administration after failing to find new owners. But it perhaps played a role in several recent large transactions from which we can discern the effect of the pandemic on pricing.

Take the sale in June of Singapore’s Canadian International School by Southern Capital, a private equity firm, to Chinese bilingual school operator Maple Leaf Educational Systems.

The school, which has around 3,500 students across two campuses, traded hands for S$680 million (£386 million). According to well-placed Asian sources, auctioneers had been asking least S$750 million – 15-times EBITDA – up to S$850 million. The final price suggests that the school lost 10-20% of its value, depending on how you slice it, due to Covid-19.

Turn to after-school tuition, a different subsector. In July, Switzerland’s EF Education First offloaded its China operation (see page 12) to Permira, a global buyout house, which acquired the English-language tuition provider at a time when most – if not all – of its centres were shut.

Recent reports suggest that negotiations had been thrown into limbo. Upon closing, reports valued the deal at $1.5 billion – $500 million, or 25%, less than the original asking price.

Now look at the higher education space.

Laureate, once the world’s biggest private university operator, in July sold its Australasia portfolio (see page 10) to US-based Strategic Education for $643 million, 13-14-times the

asset’s EBITDA. An Australia-based insider tells this publication that bankers at Goldman Sachs had originally sought offers of at least $675 million up to $765 million – indicating attrition of up to 16%.

These transactions were executed in different countries, concern companies in varying subsectors, and yet a common thread runs through each process: every organisation lost around a fifth of its pre-coronavirus value. This is hardly a groundbreaking observation. But it illuminates pricing repercussions within a market in which data pertaining to public transactions is limited. It is a helpful signal of the value erosion to expect as the pandemic grinds on.

Our cover story on pages 18-21 explores the concept of herd immunity in the context of the global K12 market – but the arguments presented in the piece could be applied to any educational industry. The gist is that there is strength in numbers, as large school groups are well positioned to consolidate further at the expense of distressed single-site institutions.

GEMS Education, the United Arab Emirates’ largest for-profit school chain, just announced it has raised $150 million of debt. Nord Anglia, a global premium school operator, had also been holding talks to raise hundreds of millions through a bond offering. Is this in anticipation of a slew of cut-price deals, or harder times on the horizon?

It is clear that education businesses are becoming cheaper. Some, cheaper than others.

And as politicians worldwide warn of second spikes and local lockdowns, pricing may well soften further if demand is subdued.

What’s not clear is how long this will last – and this is keeping providers, investors and dealmakers alike up at night. For many, this year will be considered a write-off. Without a vaccine, 2021 – and the years that follow – could be too. n

Josh O’Neill, Editor, EducationInvestor Global

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NEWS

Exclusives

Chinese property investor takes control of Gabbitas Education, tutor to Britain’s royal family Gabbitas, the 147-year-old Londonbased educational consultancy that has famously tutored members of Britain’s royal family, has been acquired by a Chinese property magnate.

This publication revealed that Calvin Ho, a Hong Kong-based property investor of Chinese origin, acquired Gabbitas in June from its former owner Shaw Trust, one of the UK’s largest charities.

Corporate filings with Companies House show that Ho was appointed as a director on 9 June, when the role of Vanessa Miner, Gabbitas’ former managing director, was terminated.

The roles of Jacqueline Oughton (director) and Stephen King (secretary) were terminated on the same date.

Oughton is Shaw Trust’s chief operating officer and King is its chief financial officer.

Shaw Trust, whose mission is to help disabled and disadvantaged people into employment, took control of Gabbitas in November 2017, when it acquired Prospects Group, its former parent.

Oughton confirmed the sale of Gabbitas to this publication and noted that Miner had been employed under a two-year contract.

Following a strategic review of Gabbitas that was initiated last year, Shaw Trust decided that “Gabbitas did not fit with the long-term objectives” of the charity, said Oughton.

She explained that a management buyout spearheaded by Miner and

bankrolled by Ho was considered but in the end was dropped in favour of a “straight sale” to Ho. “Had it fitted with Shaw Trust’s values and objectives, we would’ve retained it [Gabbitas],” said Oughton. “It’s very well-renowned and has a huge future.”

The sale illustrates a deepening trend in which Chinese investors and operators are consolidating parts of the UK private education market.

Three British independent schools – Wisbech Grammar, Heathfield Knoll and Abbots Bromley – were acquired this year by Chinese investors, while in April a cash-strapped private university was resuscitated by China Education Group.

Some 17 British private schools are now owned by Chinese entities, according to Venture Education, a China-based consultancy.

Little is known about Ho, 39, but the property investor is understood to have had a relationship with Gabbitas for several years prior to acquiring the company.

It is understood that Ho’s organisation provided office space to Gabbitas in China.

The price paid by Ho for Gabbitas is unclear.

Gabbitas had not responded to a series of questions from EducationInvestor Global at the time of publication.

(Full story available online.)

British independent school hires advisors to run auction The owners of Park School in Bournemouth, England, have hired an accountancy firm to explore a sale of the business amid the coronavirus crisis, which estimates suggest could wipe out hundreds of British private schools.

This publication learnt that the four directors of Park School, which is privately owned, have mandated corporate financiers from Mazars Group, one of the UK’s top-10 accountancy firms, to sell the school.

According to sources, Park School, which has around 380 day pupils aged two to 11, records annual EBITDA of around £1 million.

Filings with Companies House – which do not include a profit and loss account – showed that in the year ended 31 August 2019, Park School had total equity of £1.45 million.

A sale of the school is being explored during the most challenging period for private schools in recent memory, as the Covid-19 pandemic, which has already forced more

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Bournemouth, England

than 10 independent schools to close, could wipe out as many as 180, according to consultancy EY-Parthenon.

It is understood, however, that Park School remains profitable – although the impact of the coronavirus crisis on its enrolments could not be determined.

One source told this publication that “there will definitely be interest

in it” as “it seems to be doing fairly well” and is situated in a “decent location near the coast”.

Park School, which is led by headteacher Melanie Dowler, is not reviewed by the Good Schools Guide, but its most recent compliance report from 2018 by the Independent Schools Inspectorate (ISI) found that “results were well above the national average for maintained schools”.

According to the ISI, Park School is “run as a limited company with four directors, who are known as the school governors”.

Andrew Main is listed on Park School’s website as chairman of the board of governors.

Park School could draw interest from Chinese investors and operators, which collectively control 17 British private schools, according to China-based consultancy Venture Education.

Last year, Foshan-headquartered bilingual school operator Bright Scholar acquired CATS Colleges and two British independent schools, after it bought Bournemouth Collegiate School in 2018.

By car, Bournemouth Collegiate School is less than 10 minutes from Park School.

Park School was founded in 1928 in Portsmouth, but moved to its current location, one mile north of Bournemouth town centre, in 1939.

A spokesperson for Mazars Group declined to comment.

EducationInvestor Global • July/August 2020

NEWS

Exclusives

Private equity houses vie for stake in enlarged competitor to Capita SIMS spawned by merger of rival providers A trio of private equity firms are competing for a minority stake in an entity that will be formed by a merger of two UK-based school management information system providers, Arbor Education and The Key. This publication revealed that the competing companies are set to merge by September under a deal that will refinance the newly formed organisation by onboarding private equity capital.

According to three sources, buyout houses ECI Partners, CBPE Capital and Levine Leichtman Capital Partners are vying over a minority interest in the joined-up firm, which, according to insiders, will generate annual EBITDA of around £5 million and have an enterprise value of £95 million.

One private equity investor familiar with the businesses – the merger between which is being drawn up under ‘project beagle’ – said the valuation was “incredible”.

First-round bids were due on 14 July, according to one source, who said that final proposals are expected to be tabled by the end of August, paving the way for a merger the following month.

The size of the stake in the merged entity being sought by ECI Partners, CBPE Capital and Levine Leichtman – and the price for which it will be bought – is unclear.

A spokesperson for CBPE Capital declined to comment.

ECI Partners and Levine Leichtman had not responded to

requests for comment at the time of publication.

Ian Armitage is chairman of The Key, of which he owns approximately 75%, “give or take”, according to one source.

He is also a non-executive director of Arbor, in which he personally holds a 14% stake while 16% is controlled by The Key – giving Armitage and his primary organisation a combined 30% share.

Armitage, who also chairs Odyssean Capital and is an advisor to Tenzing Private Equity, injected £1 million into Arbor in 2015.

“He [Armitage] has an option to acquire the remainder of Arbor on certain terms over a certain period of time,” an insider told this publication. “To help fund

that acquisition, he’s looking for a minority investor, which will ultimately acquire a stake in the combined business.

“It’s also an opportunity for the leadership team at The Key to update their management packages.”

Armitage, a private equity veteran who from 2000-2012 was chief executive and chairman of HgCapital, which he co-founded, is being advised by management consultancy Jamieson on the merger.

Hg Capital owns Access Group, a UK-based provider of business management solutions to companies across a range of industries, including education.

Armitage declined to comment.

(Full story available online.)

London-listed private equity group ‘frontrunner’ to acquire BIMM London-listed private equity firm Intermediate Capital Group (ICG) is the frontrunner in a race to acquire the British and Irish Modern Music (BIMM) Institute, three sources told this publication.

This publication learnt that ICG, which is listed on the London Stock Exchange and valued at around £4.2 billion, is closing in on the private music college, which was put up for sale last summer by its owner Sovereign Capital Partners.

The London-based mid-market buyout house hired investment bankers from Houlihan Lokey to drum up interest in BIMM, which has been on the market for over a year and at one point drew attention from Inflexion Private Equity Partners, according to sources.

Since January 2018, ICG has owned PSB Academy, a Singaporebased tertiary education provider with campuses in the city-state, as well as in Indonesia and Myanmar, that offers degrees awarded by Australian universities.

It also controls UK-based Supporting Education Group, whose subsidiaries include Judicium Education, a school services provider; Best Practice Network, a provider of training and accreditation; tutoring network InTuition Clubs; and Teaching Personnel, a recruitment company.

Two sources said that ICG was in exclusive talks with Sovereign Capital Partners, which also owns London preparatory school group Eaton House, while another insider described it as “the frontrunner” to acquire BIMM.

EducationInvestor Global • July/August 2020

The development comes four weeks after BIMM – which Sovereign describes as “Europe’s largest and leading music college group” with around 7,500 students at campuses in the UK, Ireland and Germany – acquired the Northern Ballet School in Manchester.

In accounts filed with Companies House for the year to 31 August 2019, BIMM reported EBITDA of £16.9 million against revenues of £43.3 million.

Its profit for the year was £11.7 million.

A spokesperson for ICG declined to comment.

Houlihan Lokey declined to comment.

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

Sovereign took over BIMM in 2010, when it had 1,150 students enrolled at its colleges in Brighton and Bristol in the UK. BIMM, which boats an 86% graduate employment rate in creative arts, according to Sovereign, now owns 12 colleges across Europe.

Last March, it was granted degreeawarding powers in the UK, where it is headquartered.

BIMM is led by chief executive Adam Carswell, who joined the firm in 2011 from an apprenticeship provider, where he was finance director.

The impact of the coronavirus crisis on BIMM’s enrolments is unclear.

Former BIMM students include pop artists George Ezra, Tom Odell and James Bay. (Full story available online.)

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NEWS

Policy

UK DfE forms higher education restructuring regime and warns universities could be allowed to fail The UK government has established a “restructuring regime” to review the impact of Covid-19 on universities’ finances and decide on a case-by-case basis whether to provide bailouts.

In a document published on 16 July by the Department for Education, the government stressed that “the regime does not represent a taxpayer-funded bailout” as “it is not a guarantee that no organisation will fail”.

It is perhaps the clearest statement by the government since universities warned in April of the need for a sector-wide bailout that the state will not guarantee the future of every institution.

Instead, the Higher Education

Restructuring Regime is designed “to support providers in England who are at risk of market exit due to the challenges of Covid-19”.

A report from the Institute for Fiscal Studies warned that 13 unnamed universities were facing insolvency.

Higher education providers approaching the DfE for loans will be “considered on a case-by-case basis, to ensure that there is a sound economic case for government intervention”.

Loans from the public purse to support restructuring would be “a last resort”.

The DfE noted that the “majority of providers” will not require the regime’s support, “but will

nevertheless be looking to undergo their own restructuring to ensure that are better suited for the postCovid world” – suggesting a spate of financial overhauls loom on the horizon.

The government’s position crystallises reports earlier this year that the Treasury was opposed to granting the higher education sector an outright bailout, despite a potential multibillion-pound blackhole in university balance sheets caused mainly by a fall in international enrolments.

“Where it is needed, the Restructuring Regime will provide support to individual providers that are trying to head off financial failure and, when a case is made

for public funding, we will provide support in a way that ensures it can emerge strongly from the challenges Covid-19 has brought, ready to make a valuable contribution to addressing our country’s future needs,” the document states.

The DfE set three “clear and overarching objectives” that will guide assessments of cash-strapped providers.

These are: protecting the welfare of students; preserving the sector’s internationally outstanding science base; and supporting the role that higher education providers play in regional and local economies through the provision of highquality courses aligned with economic and societal needs.

US government drops controversial threat to eject international students taking online-only courses The US government U-turned on a plan to eject international students from the country if university courses were online-only next year, after sparking backlash from dozens of colleges and businesses.

The judge overseeing a lawsuit tabled by Harvard and the Massachusetts Institute of

Technology that the US Immigration and Customs Enforcement would revert to its earlier guidance and permit foreign students to remain, even if their degrees are wholly virtual due to the Covid-19 pandemic.

The move came a week after the prominent US universities took legal

action to block new rules created by the Trump administration that would deport international students, or force them to transfer schools with physical teaching, if their course instruction was online-only in the next academic year.

The controversial policy change prompted criticism from US

universities, business groups and large organisations, many of which, including Facebook, Google and Microsoft, filed briefs in support of Harvard and MIT’s lawsuit.

Attorney generals representing 18 states and the District of Columbia also filed two lawsuits in a bid to block the rule.

Saudi Arabian government wants private investors to expand SEN and boarding provision Saudi Arabia’s education minister has said his department is working on plans to attract investors to develop boarding schools and institutions for children with special educational needs in the kingdom.

The General Department for International and Foreign Schools will sit within Saudi Arabia’s Private Education Agency and aims to support investors in the

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sector and develop governance, including working procedures, said Dr Hamad bin Mohammed AlAsheikh, according to Arab News.

The country’s Education Ministry will remain the sole authority for issuing licences and providing consultations around foreign education.

Al-Asheikh said that the ministry will provide support to enhance investment in Saudi Arabia’s

education sector and increase the number of international schools “in a way that enhances our educational outcomes”.

He added that it will reconsider the rules and regulations governing the establishment of private educational institutions.

EducationInvestor Global • July/August 2020

NEWS

Early years

Third of UK childcare practices could close within a year Childcare platform Childcare.co.uk says a third of childcare providers (33%) believe they may have to close their practices permanently in the next six to 12 months, as they deal with reduced capacity, rising operating costs and government support ineligibility.

A survey of more than 1,600 providers found that nearly fourfifths (78%) of providers believe the government hasn’t given enough financial support to the early years sector, while four-fifths (81%) stated they were currently operating at a loss.

Richard Conway, founder of Childcare.co.uk, said: “As the lockdown becomes increasingly less restrictive, many in the UK can see the light at the end of the tunnel. However, for many childcare providers it’s difficult to predict when things might start

looking up for them, especially when they’re faced with challenge after challenge.

“As a platform which is heavily involved in both the parent and provider community, we know the struggles both have had to endure throughout lockdown, and we don’t think many can deny that the early years sector needs additional support and clarity.

It would be devastating to the economy if a third of providers were to close within the year, so I think it’s time for the government to step up and support the sector that facilitates working families and childcare development.”

UK: Welsh language nursery in Cardiff acquired A Welsh language nursery in Cardiff has been acquired in a deal backed with a six-figure lending facility from NatWest, BusinessLive has reported.

Si-lwli Nursery has been acquired by husband and wife team Graham and Charlotte Forrrester after they secured a £250,000 loan from NatWest to part-finance the acquisition.

Si-lwli, was established in 2003 and has a capacity for 51 children.

The Forresters have become directors of the nursery and have retained the team of 21 full and parttime staff.

Graham Forrester said: “When the opportunity arose to purchase Si-lwli, it was an easy decision for us, given our business and childcare experience, to take over ownership. Not only is Cardiff a growing city with increasing demand for childcare, but there are a limited number of Welsh medium nurseries like ours.

“With the Welsh Government’s vision for a million Welsh speakers by 2050, immersing children in the language at a young age is crucial.

Cardiff, Wales

US: WeWork offloads two education businesses WeWork, the shared office space provider, has recently divested two of its education businesses.

The co-working real estate startup, which was once valued at $47 billion before its fall from grace, has sold coding bootcamp Flatiron School to Carrick Capital Partners, a technology-focused private equity firm.

WeWork also reportedly sold the assets of WeGrow, its private kindergarten, to WeWork

co-founder Rebekah Neumann, who had led the unit as its chief executive.

The terms of both transactions were undisclosed, but WeWork paid around $28 million for Flatiron in 2017 and reports suggest that WeGrow traded for less than $1 million.

Launched in 2018, WeGrow was touted as a “conscious entrepreneurial school” that combined yoga, mindfulness

EducationInvestor Global • July/August 2020

and other wellness enrichment programmes into its curriculum.

Tuition reportedly reached upwards of $42,000 and around 100 students were enrolled last October, when the company announced it was to close down after the 2019-20 academic year.

According to reports, Neumann acquired the rights to the curriculum of the pre-school and plans to relaunch it as Students of Life For Life, or SOLFL, pronounced ‘soulful’.

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NEWS

K12

British boarding schools secure chartered flights to bring back Chinese students British boarding schools are chartering flights from China this month to ensure international pupils can return, underscoring the private sector’s reliance on income from lucrative foreign students.

The Boarding Schools’ Association, which represents more than 500 schools across the UK, has worked with a Chinese airline to secure flights for pupils from China on certain dates in August, iNews reported.

The outlet cited a statement by Robin Fletcher, chief executive of the BSA, who said: “BSA has been co-ordinating flights to support the safe return of boarding students from China to the UK.”

There are more than 16,000 students from China and Hong Kong at schools that are members of the Independent Schools Council,

meaning China sends more pupils to UK private schools than any other country.

Boarding schools are said to be

taking a range of measure to ensure the arrival of Chinese students is smooth and safe.

These include sending staff to meet pupils at airports, assisting with travel to schools, and providing quarantining facilities if coming from countries where 14 days’ self-isolation is required upon arrival, iNews reported.

The move to enable Chinese students to resume studies in the UK in the autumn comes at a time of geopolitical tensions between the two countries following Boris Johnson’s government’s decision to strip Huawei from Britain’s 5G network.

First Chinese private school to open in Dubai The Chinese School Dubai, mainly focused on catering to the Chinese community in the emirate, will open in Mirdif in September, The Khaleej Times reported.

The school will initially offer classes up to Grade 5 and operate on a non-profit basis. When fully operational it will add 2,000 places to Dubai’s private education sector.

Students will learn an enriched

Chinese national curriculum, and will be offered Arabic as second language, Islamic studies, moral education and UAE studies based on the UAE national curriculum.

The school will admit Chinese and foreign students.

Dr Abdulla Al Karam, chairman of the board of directors and director general of the Knowledge and Human Development Authority,

said: “China and the UAE have had a close long-standing friendship, and there’s no better symbol for that friendship than a school. The Chinese School Dubai will be the heart of the Chinese community in Dubai and foster a rich exchange of teaching and learning opportunities with other schools in Dubai.

“We are honoured that the first Chinese-curriculum school

outside of China is opening in Dubai. We look forward to the new possibilities and connections this will bring to our education community.”

The school is the first overseas Chinese school to receive financial support from the Chinese government. Its teachers are recruited by the Hangzhou Education Bureau.

US: Californian districts take alternate stances on reopening schools as Trump reiterates funding threat School districts in California are at odds with one another over plans to reopen in September, while the federal government continues to demand that all US schools resume in-person teaching or risk losing funding.

California’s two largest school districts, Los Angeles and San Diego, said that classes will remain online-only throughout the autumn term, as the state continued to grapple with rising numbers of Covid-19 cases.

“There’s a public health imperative to keep schools from becoming a petri dish,” said Austin Beutner, the school superintendent in Los Angeles, whose county is home to more than a third of the state’s coronavirus cases.

Decisions on reopening schools in the US are made at the local level.

This has resulted in a patchwork of plans, the latest thread in which is expected to come when Orange County, another Californian state in which resistance to mandatory mask-wearing orders is reportedly

EducationInvestor Global • July/August 2020

widespread, recommends that schools resume face-to-face instruction.

Meanwhile, at the state level, US education secretary Betsy DeVos has reiterated the Trump administration’s push to re-open schools fully in September and repeated the government’s threat to withdraw funding from schools that do not comply.

In an interview with CNN, DeVos said “the rule should be that kids go back to school this fall”, adding

that any Covid-19 hotspots can be “dealt with on a school-by-school or a case-by-case basis”.

The US’s disjointed approach to school re-openings comes as the country struggles to quell Covid-19, which has infected nearly 3.5 million people and killed 138,000.

Much of the disagreement on how to get pupils back in classrooms stems from wider debate over the effectiveness of face coverings and masks at curbing the spread of the coronavirus.

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NEWS

Higher education

Laureate Education climbs 14% after offloading Australasian portfolio for $643m Laureate Education has sold its Australia and New Zealand portfolio to Strategic Education for $643 million, as the US-listed private university operator continues apace with its divestment strategy.

The all-cash transaction, which has been approved by both companies’ boards but is subject to “potential adjustments”, will see US-based Strategic Education take control of Torrens University Australia, Think Education and Media Design School, which collectively cater to more than 19,000 students.

Following the transaction, which is expected to close in the first quarter of next year, Strategic Education will serve nearly 110,000 students across more than 85 campuses in the US, Australia and New Zealand.

After the deal was announced, Laureate climbed 14% while Strategic Education tumbled 17%.

Strategic Education said that the transaction will diversify its offering outside of the US and “be immediately, and significantly, accretive” to earnings.

Actis-backed Honoris acquires Nigerian university Honoris United Universities, the pan-African higher education group backed by private equity firm Actis, has acquired Nile University Nigeria, expanding into West Africa.

Established in 2009, Nile University of Nigeria is fully accredited and offers a range of undergraduate and postgraduate programmes in arts and social scienes, engineering, law, management sciences, natural and applied sciences, and medical and health sciences.

The acquisition by Honoris, which is three years old, brings its number of institutions to 11, whose 60 campuses

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are located in 10 countries spread across 32 cities and collectively educate 45,000 students.

With the largest population and economy in Africa, Nigeria is poised to “lead a new generation of African leaders and professionals”, Honoris said in a statement.

Nile University of Nigeria’s medical school will bolster Honoris’ medical simulation centre in Tunis, the firm said, which trains more than 3,500 students and upskills healthcare professionals.

Honoris said that it offers more than 280 degrees.

Karl McDonnell, chief executive of Strategic Education, said: “By combining our expertise in digital education with Australia’s only investor-funded university, we will create a formidable growth platform that will enable us to pursue our mission of enabling economic mobility throughout the Oceania and Asian regions.”

BofA Securities acted as financial advisor to Strategic Education and Hogan Lovells provided legal advice.

The transaction represents the latest link in a chain of

divestments by Laureate, which has in recent years offloaded universities across Asia and elsewhere to clear from its balance sheet debt incurred by its former private equity owners.

Earlier, it was reported that Laureate was considering selling its assets in Brazil.

In March, the company sold its Malaysian portfolio to Hong Kong-based HOPE Education for $140 million.

In 2015, Laureate’s debt-toequity ratio stood at 13. Now, this figure stands at 0.83.

Skema creates joint school in China

Skema Business School has signed two new strategic agreements with two Chinese academic institutions: Nanjing Audit University and Xian’ Jiaotong University, a member of the Chinese Ivy League, the nine largest universities in the country.

With Nanjing, Skema has created a joint school and with Xian’ Jiaotong, a master’s degree in entrepreneurship and innovation focused on data management and artificial intelligence.

The NAU-SKEMA Institute will start recruiting its first cohort of around 300 students in China in September through the Gaokao.

They will follow a four-year fulltime undergraduate course, which includes four hybrid courses of

study that offer students a variety of possible career paths: financial engineering, audit, information management and information systems management, and engineering management.

Alice Guilhon, Skema’s managing director, said: “These joint cooperation projects contribute to deepening educational exchanges between France and China and I am happy that Skema finds its place in them. They are also a strong link in the school’s SKY25 strategic plan to pursue its international development, which is based, in parallel with the opening of international hubs, on agreements with the best institutions in the world.”

EducationInvestor Global • July/August 2020

NEWS

Higher education

Industry reacts to warning that 10% of UK universities could go bust without state bailout More than a dozen UK universities are at risk of collapse due to widespread losses stemming from the coronavirus crisis, a new study has found.

Losses across the country’s higher education sector could range from £3 billion to £19 billion – or between 7.5% and half of overall annual income – meaning some universities face “a very real prospect” of insolvency unless they are bailed out by government.

Research by the Institute for Fiscal Studies (IFS), a think-tank, found that the financial hit will be unevenly distributed.

High-ranking institutions with high numbers of international students will face the biggest immediate drop in income, but are better positioned to weather losses.

Less reputed universities with limited exposure to international students but lower cash reserves are at a higher risk of insolvency, the study found.

Assuming a central estimate of losses totalling £11 billion, the IFS said that 13 universities – comprising around 10% of the market – could end up with negative reserves, requiring bailouts to evade extinction.

While a sector-wide funding injection would likely fail to save the most at-risk universities, a “targeted” bailout of just £140 million could spare institutions from insolvency, the IFS said.

However, some sector commentators poured cold water on the IFS study, which did not name at-risk institutions, suggesting that its estimates are wide of the mark.

Nick Hillman, director of the Higher Education Policy Institute think-tank, was reported as saying that they should be taken with a “lorry load of salt”.

He said: “Unless there is a major second wave of Covid-19, the IFS’s ‘central’ estimate for the short-term financial losses would be better labelled ‘pessimistic’ and their ‘pessimistic’ estimate would be better labelled ‘extreme’.”

Ian Koxvold, head of education strategy at PwC, noted that although universities could go into negative reserves, “this doesn’t mean negative net assets – they are sitting on a lot of property against which they can secure debt”.

He continued: “My experience is that lenders are very keen to support genuine restructuring, and are happy to underwrite mediumterm debt to enable this.”

Glynne Stanfield, partner at law firm Eversheds Sutherland, which counts a number of UK universities as clients, was less optimistic, however.

He said that “I do think that the [IFS’s] forecasts are credible and perhaps even a little optimistic”.

According to Stanfield, a “number of factors will come into play”, including universities’ reliance on income from overseas students; the number of deferrals

by UK and European students; and institutions’ reserves, such as cash, buildings and other assets.

He stressed that while the IFS has set out potential scenarios for UK universities, “we should also bear in mind that the Welsh, Scottish and Northern Irish

universities may do something different to [those in] England”.

He added that around eight to 10 private investors – some from outside the UK – “want to invest in UK higher education, so you could argue that the costs of saving atrisk universities may be negligible because it is a risk that the private sector is keen to take on”.

Stanfield continued: “Thus, ignoring state bailouts, the small number of universities mentioned in the [IFS] report might be better placed looking to private sector options, such as partnerships along the lines of Richmond University”, which was bought by a Chinese investor in April after flirting with bankruptcy.

Julie Mercer, partner at education-focused strategic consultancy Cairneagle Associates, said she expects that “more than 13” universities are at risk of bankruptcy.

She said that recent data showcasing an uptick of 1% in acceptances by universities – which ratings agency Moody’s said was a testament to their “resilience” – “no doubt hides the winners and losers” as this was an across-the-board finding.

United Arab Emirates: Amanat confirms sale of Middlesex University Dubai to Study World United Arab Emirates-listed private equity firm Amanat Holdings is to sell Middlesex University Dubai to Study World Education Holding Group, it said in a stock market statement.

Amanat did not disclose financial details of the transaction in a statement to the Dubai Financial Market, on which its shares trade, but said it would “update the market if and when there are any material

developments in this regard”.

The transaction is subject to regulatory approvals and an “estimation of final consideration”, said Amanat, which also owns private school operator Taaleem, Abu Dhabi University Holding Company and the property assets of North London Collegiate School’s Dubai offshoot.

Study World, which was founded by Indian businesswoman Vidhya Vinod, operates schools in

EducationInvestor Global • July/August 2020

Dubai, India, Sri Lanka and Malta.

Middlesex University Dubai launched in 2005 and has more than 3,500 students from more than 100 countries.

Amanat acquired the campus in 2018 for around $100 million, according to reports, from the liquidators of scandal-warped buyout house Abraaj, the university’s former owner.

One advisor was “surprised” that Amanat had decided to exit

the company after just two years, given that private equity holding periods typically span four-toseven years.

“They’ve held the asset for a very short time,” the advisor said, noting that “Study World owns a few other branch campuses and is consolidating”.

Amanat’s chief executive, Mohamad Hamade, did not respond to a request for comment by the time of publication.

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Further education & skills training

China: TAL sees online revenues rise but records first-ever loss as Covid-19 cripples centre-based business The world’s largest education company now derives nearly a fifth of its revenues from digital courses, compared to just 7% two years ago, evidencing the growing importance of online tuition in centre-based providers’ business models.

TAL Education Group, the afterschool tuition provider which is worth $40 billion, based in China but listed in New York, said in its annual report for the fiscal year 2020 that online courses generated 18.9% of its total net revenues.

This was up from 7% in 2018 and 13.3% last year – highlighting how online education is an expanding source of income at the centrebased organisation, which operates thousands of brick-and-mortar tuition venues across mainland China.

Still, face-to-face provision accounts for the majority of TAL’s revenues, 35% of which are derived from tuition centres in five Chinese cities – Beijing, Shanghai, Guangzhou, Shenzhen and Nanjing.

But, for the first time since floating on the New York Stock Exchange in 2010, TAL recorded a net loss in the fiscal year 2020, totalling $110.2 million – despite a 28% increase in revenues to $3.27 billion – which it attributed to “many factors”.

These included new investments and acquisitions, which “may cause our margins to decline before we successfully integrate the acquired businesses”, and a “significant increase” in operating expenses, as well as adverse effects of the coronavirus pandemic.

“Our ability to return to or maintain profitability and maintain or improve margins is affected by various factors that are beyond our control, such as

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the Covid-19 pandemic,” TAL said in its report.

Year-to-date, TAL’s share price is up 38% at $68.38.

The Covid-19 outbreak prompted authorities in China to close all educational centres, along with most other businesses, in February, which has meant that in-person tuition providers, like TAL, have lost income from students who did not transfer to online classes.

“Our business has been and is likely to continue to be materially adversely affected by the outbreak of Covid-19,” said TAL. The company added, though, that “we believe that the decrease in revenues from offline learning centres will be partially offset by the increase in online revenues”.

However, despite issuing refunds and compensation and offering online alternatives, “there still could be cases of customer dissatisfaction and complaints as a result of the drastic changes”, said TAL. Earlier, rival organisation New Oriental, which is also based in China but listed in New York, announced that it would take on $300 million of debt for “general corporate purposes”, though a source suggested the money would be spent on short-term debt repayments.

Permira acquires Chinese division of EF Education First

Global investment firm Permira and EF Education First announced that a company backed by the Permira Funds has agreed to acquire a majority stake in the EF Kids & Teens business headquartered in Switzerland with schools in China and Indonesia.

EF will retain a significant ownership in the Kids & Teens business. With over 20 years of operations, EF Kids & Teens is a in premium English-language education provider with 288 schools across 62 cities in China and 79 schools in Indonesia and one of the largest networks of international teachers.

Over the past few months, EF Kids & Teens says it has helped hundreds of thousands of students learn online through EF’s proprietary learning platform and live EF teachers from around the world.

This strategic partnership aims to accelerate EF Kids & Teens’ growth.

The company plans to expand the school network, invest heavily in academic programmes and deliver more innovations.

Robin Bell-Jones, partner at Permira added: “China has emerged as the world’s largest and most advanced market for educational services and Permira is a firm believer in the importance of highquality education powered by technology. This exciting partnership builds on Permira’s successful track record of backing entrepreneurs in Asia and growth investments in education and ed tech, with Curriculum Associates and Renaissance Learning in the US and Universidad Europea in Europe. We have long admired EF Kids & Teens’ relentless focus on product and service quality, which together with its impressive online innovations, position the business optimally in a hybrid learning world. We concluded that there is simply no better way for a child to learn English and look forward to being a long-term partner to EF Kids & Teens.”

The transaction is subject to customary conditions.

EducationInvestor Global • July/August 2020

NEWS

Further education & skills training

UK: Apprenticeship starts fall 60%, delivering blow to Treasury’s training-driven recovery plan Apprenticeship starts in the UK in May were down 60% year-on-year, a statistic that will be unwelcomed by the government as it places skills training at the centre of its plan for economic recovery from Covid-19.

Boris Johnson’s pledge of an apprenticeship for every young person is under threat as data from the Department for Education shows that starts for those aged 16-18 were 79% lower than in May last year.

The figures demonstrate the crippling impact of pandemic-linked lockdown measures on employers’ ability to implement new workplace training initiatives.

At the same time, they make for bleak reading for providers and investors in the apprenticeship and

training sector, which had already seen a decline in starts prior to the Covid-19 outbreak.

Since April 2017, apprenticeship training in England has been funded by what is essentially a tax on large employers with wage bills in excess of £3 million, requiring them to set aside 0.5% of salary costs each month.

The scheme has increased flexibility around the kind of training on which employers can spend levy funds but has failed to drive up the number of apprenticeship starts.

Between 23 March and the end of June, British organisations reported 34,690 apprenticeship starts – 52.3% lower year-over-year.

Lockdown measures linked to the coronavirus conundrum have made it difficult – impossible, in some cases – to provide training that requires elements of face-toface instruction or work experience.

The challenges and decreased number of starts follow chancellor Rishi Sunak’s summer statement, in which he announced that the Treasury will pay employers £2,000 for each new apprentice under 25, and £1,500 for each over that age.

This is part of wider efforts to mitigate unemployment stemming from the pandemic, which forecasts suggest could put 15% of the UK population out of work.

DfE data shows that most new apprenticeships are being undertaken

by people aged 25 and above.

Learners in this cohort comprised 64.9% of new starts between 23 March and 30 June – rising from 56.5% in the same period of last year.

Higher – or university-level – apprenticeships, some of which are equivalent to MBAs, accounted for 33.1% of starts between 23 March and 30 June, up from 18.2% a year prior.

In April, it was reported that the government was poised to axe MBAlevel apprenticeships amid concerns that the levy scheme – designed to get younger, less experienced people into work – was being exploited by employers to upskill senior executives.

Spain: Private equity pioneer KKR acquires training firm MasterD in €150m deal KKR is buying a majority stake in Spanish vocational training provider MasterD in a deal that will bolster the private equity pioneer’s global education portfolio.

The firm’s founder Luiz Gomez and MasterD’s management team will reinvest alongside the $36 billion listed asset manager, which is said to have valued the company at ¤150 million, including debt, Bloomberg reports.

A well-placed source told this

publication that MasterD, which providers more than 280 courses to over 50,000 people in Spain and Portugal via its online platform, records annual EBITDA of ¤10-15 million.

KKR is investing in MasterD through its first Global Impact Fund, which closed at $1.3 billion earlier this year and seeks to capitalise on a burgeoning trend in which socially responsible investments focus on climate change, clean water and workforce development.

“MasterD is helping address a critical societal challenge in improving employability and skills, which aligns very strongly with the objectives of KKR’s strategy around impact investing,” Stanislas de Joussineau, KKR’s head of global impact for Europe, the Middle East and Africa, said in the statement.

The transaction will see KKR expand its footprint in the global education arena, in which it

already controls US-based digital reading platform OverDrive, which it acquired in January, and India’s EuroKids International.

Founded in 1976 by cousins Henry Kravis and George Roberts, and Jerome Kohlberg, KKR is widely regarded as the pioneer of leveraged buyouts.

Listed on the New York Stock Exchange, it is one of the world’s largest private equity companies, managing some $150 billion of assets.

US: KnowFully acquires CME Outfitters KnowFully Learning Group, a provider of continuing professional education and exam preparation courses to the healthcare, accounting and finance sectors, announced it has acquired CME Outfitters (CMEO), an accredited provider of continuing medical education.

Since its founding in 2002, Bethesda, Maryland-based CMEO has offered education and resources to clinicians and patients around the globe, as well as accreditation services for non-accredited organisations. CMEO focuses on educating community-based primary care and specialty providers and has

EducationInvestor Global • July/August 2020

broad expertise across psychiatry, neurology, gastroenterology, dermatology, rheumatology, virology, respiratory, cardiology, endocrinology, and oncology.

CMEO also provides pharmacy, nursing, and dental continuing education credits. Educational delivery formats include live and

on-demand online educational activities, medical simulations, interactive infographics, surgical skills workshops, and live symposia.

CMEO co-founders and Managing Partners Jan Perez and Shari Tordoff, as well as the rest of the management team, will continue to lead the CMEO business.

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NEWS

Ed tech & services

Venture capitalists rained $4.5bn onto ed techs during ‘unprecedented’ first half Some $4.5 billion of venture funding was poured into ed techs during the first half of this year, according to HolonIQ, an “unprecedented” period in which investors sought to capitalise on a boom in online learning.

The first six months of 2020 were “momentous”, the data provider’s chief executive Patrick Brothers said, noting that there are now 19 ed tech ‘unicorns’ – whose valuations exceed $1 billion – which have collectively raised

more than $9 billion over the past decade.

“Keep an eye out over the next six months as new investors, large and small, around the world seek to deploy capital to fuel education innovation at scale,” said Brothers, whose organisation forecasts that the next 10 years will see more than $87 billion injected into ed tech.

Over the past six months, during which schools, universities and other educational centres have been forced to close to curb the

spread of Covid-19, investors have sought to supply fledgling companies with cash to scale to meet rising demand for online education.

The $4.5 billion invested in ed tech over the past six months exceeds the $4.4 billion rained on education start-ups throughout the whole of 2017.

It represents more than half of the $7 billion of investment recorded last year.

The past six months have

spawned numerous new ed tech unicorns, including Quizlet, which in May was valued at around $1 billion when it raised $30 million in a Series C. More recently, in July, Indian online tutoring platform Byju’s became ed tech’s first ‘decacorn’, a term given to companies whose value exceeds $10 billion, when it reached a $10.5 billion valuation in securing investment from Bond, the first female-founded venture capital fund.

India: World’s first ed tech ‘decacorn’ Byju’s to receive $400m injection from billionaire Investment firm DST Global, headed by billionaire Yuri Milner, is expected to give Indian online education firm Byju’s a $400 million injection.

Byju’s, which earlier this year became the world’s first ‘decacorn’ as its valuation reached $10.5 billion, simplifies math and science concepts for K12 students through games and videos on an app. It has more than 57 million registered users and over 3.5 million paid subscribers.

The start-up doubled revenues in the financial year that ended

in March 2020 to 28 billion rupees ($373 million) from the previous year.

Billionaire Milner has previously backed large internet businesses including Alibaba, Facebook and

Twitter as well as a string of Indian start-ups across various sectors.

Since inception in 2011, Byju’s has raised about $995 million from investors including Naspers, Tencent, Verlinvest, the Chan-

Zuckerberg Initiative, Sequoia Capital, Lightspeed Venture Partners and Aarin Capital.

In January this year, Tiger Global Management, a US-based hedge fund, invested $200 million in Think and Learn, the technology company that owns the Indian learning app.

Last year, Byju’s received $150 million from Owl Ventures and the Qatar Investment Authority, which recently participated in a $750 million funding round for Chinese online tutoring provider Zuoyebang.

Australia: Canva for Education raises $60m as valuation balloons to $6bn Ed tech unicorn Canva for Education has raised US$60 million of new funding as its valuation reached $6 billion.

Since March, Canva said it has seen its number of active users increase tenfold, with users across 90,000 schools and universities worldwide using its platform.

Since launching in 2013, Canva, which enables users to design “anything

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and publish anywhere” using dragand-drop tools, has amassed more than 30 million users across 190 countries.

Canva’s platform facilitates the design of education-specific content, such as worksheets, lesson plans, how-to videos, infographics and presentations.

It describes itself as a “one-stop shop for creating and collaborating in the classroom”.

EducationInvestor Global • July/August 2020

NEWS

Ed tech & services

Chinese online tutoring provider raises $750m as its valuation reportedly hits $6.5bn Beijing-headquartered online tutoring firm Zuoyebang has raised $750 million in fresh financing as investors continue to rain money onto Asia’s booming ed tech sector.

Tiger Global, a US-based investment house, and Hong Kong buyout group FountainVest Partners led the six-year-old firm’s Series E funding round, which also saw participation from SoftBank’s Vision Fund, Sequoia Capital China, Xiang He Capital and the Qatar Investment Authority.

Zuoyebang is best known for its problem-solving app, by which students can upload pictures of problems, such as equations, and have them solved through artificial intelligence.

The company, which reportedly targets K12 students enrolled in China’s compulsory education

system, has 170 million active monthly users, some 50 million of whom use the app every day. More than 12 million of these users are paid subscribers.

For context, around 200 million K12 students were enrolled in Chinese schools last year.

The capital injection into Zuoyebang, which has reportedly been valued at $6.5 billion, crystallises a report earlier that the company had been seeking to raise between $600 million and $800 million in new funding.

Zuoyebang is one of a number of Chinese online tutoring providers to reach unicorn status in recent years.

Others include VIPKid and Yuanfudao, which in March secured $1 billion in a financing round led

by Tencent and Hillhouse Capital that valued the firm at $7.8 billion.

Beijing, China

UK: Discovery Education acquires Spiral Discovery Education, a provider of digital curriculum content and professional learning for primary and secondary schools, announced the acquisition of Spiral, a platform which supports collaborative learning and formative assessment in the classroom and at home.

Terms were not disclosed.

Discovery Education vicepresident of corporate development

and strategy Philip Nanney said: “Discovery Education is focused on providing schools with outstanding digital services that connect pupils to learning in and out of the classroom. The acquisition of Spiral aligns with our strategy of adding features to our digital services that save educators time and increase pupil engagement. We look forward to welcoming Spiral

to the Discovery Education team.”

Hamish Kennedy, Spiral’s founder and chief executive, said: “Spiral’s team is incredibly excited to join Discovery Education.

Discovery Education shares our commitment to connecting students to learning no matter where they are, and we look forward to working closely on that mission with our new colleagues.”

In August last year, Discovery Education announced the purchase of Inspyro, a provider of virtual reality and augmented reality content, also based in the UK. In the UK Discovery Education is based in Hammersmith, London.

Its parent company is located in Charlotte, North Carolina. Spiral is headquartered in east London.

Private equity-owned Brazilian distance education provider eyes US listing Brazil-based distance education provider Uniasselvi has confidentially filed with Wall Street’s watchdog to list in the US, according to Reuters.

The publication said that in February Uniasselvi instructed bankers from Goldman Sachs, Morgan Stanley and Bank of

America to manage an initial public offering on the Nasdaq exchange, but suspended those plans amid market turmoil stemming from the Covid-19 pandemic.

However, given forecasts of heightened demand for online education, the firm decided to revive its IPO plans and aims to list

EducationInvestor Global • July/August 2020

shares by the third quarter, Reuters reported.

Both Uniasselvi and its shareholders – private equity houses Carlyle Group, Neuberger Berman and Vinci Partners – will sell shares in a floatation that is expected to generate $250 million, according to the report.

If the initial public offering comes to fruition, the firm, which has around 200,000 students, would join two other Brazilian education groups whose shares are listed in the US – Arco Platform and Afya.

Uniasselvi had “no immediate comment”, according to Reuters.

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NEWS

Philanthropy

US: Dominion Energy pledges $35m for black higher education Dominion Energy is supporting 11 historically black colleges and universities in Virginia, Ohio, North Carolina and South Carolina through a $35 million initiative aimed at promoting higher education equity.

The six-year HBCU Promise programme will provide $25 million in funding to select institutions. Additionally, a $10 million scholarship fund will support African American and underrepresented minority students across the company’s service territory.

Thomas F Farrell, II, the Dominion’s chairman, president and chief executive, said: “We have all been witness to our country’s evolving conversation on race and social justice. The country is changing, and we have been looking for ways that we can make a difference. Investing in these important institutions – which serve

as a springboard for social and economic mobility for so many – is one way we can help. We have actually partnered with HBCUs for nearly 40 years, offering volunteer and financial support. As I have said before, we are humbled and honoured to continue supporting them with this current initiative.”

In selecting the institutions, the company looked at a range of factors, including locations with a significant customer presence, past partnerships and opportunities to make immediate impact. In structuring the partnerships, the company will focus on four general areas: operating needs, urgent capital needs, endowment and scholarships. Some details remain to be worked out. But Dominion Energy plans to tailor packages to the needs of each institution.

Dominion Energy is based in Richmond, Virginia.

US: $1m scholarship endowment for black law students

The Rosalie and Harold Rae Brown Charitable Foundation has gifted $1 million to the University of Southern California’s Gould School of Law to help African-American students.

The gift includes the $1 million scholarship endowment along with an additional $50,000 gift for current use toward merit scholarships for law student applicants, beginning with the incoming class in autumn 2021, with a positive consideration in the selection process given to students who self-identify as African-American.

The contribution was made by USC alumnus Harold Brown, who named the scholarship in honour of his parents.

Brown said: “I have the utmost respect for people who work hard to further their education, and I’m very pleased that the Rosalie and Harold

Rae Brown Charitable Foundation can help talented, deserving students achieve their goals. I hope this scholarship makes a difference in the lives of Gould students, who will then go on to make a difference in the lives of so many others during their legal careers.”

USC Gould dean Andrew Guzman said: “The strength of our law school is rooted in its diversity – of backgrounds, cultures, ideas and perspectives. Yet we recognise that there is much more work to be done on this important front. It’s an ongoing process of improvement.

This generous gift helps us in our journey to become a better, more inclusive institution, which in turn helps the legal profession become more diverse and more representative of the communities it serves.

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EducationInvestor Global • July/August 2020

NEWS

NEWS IN BRIEF

Brazilian education company n Ser Educacional is considering a potential acquisition of assets owned by Laureate Education in Brazil, Reuters has reported.

Ser Educational stated: “The company is always attentive and constantly evaluating opportunities for strategic operations to create value for its shareholders and stakeholders in general,” adding that no deal has been signed yet.

Vasta Platform intends to raise n $306 million from the sale of its Class A common stock in an IPO, The Street has reported.

Sao Paulo-based Vasta Platform provides education content and administrative technology solutions to K12 partner schools in Brazil.

Vasta has received at least $1.2 billion from investors including Cogna Educacao, the large private education company in Brazil.

n Boxlight Corporation, which provides interactive technology solutions for the global education market, has announced the pricing of its underwritten public offering of 15 million shares of its common stock at a public offering price of $2 per share.

EducationInvestor Global • July/August 2020

The gross proceeds from the public offering will be approximately $30 million, before deducting underwriting discounts and commissions and estimated offering expenses.

Maxim Group is acting as sole book-running manager and National Securities Corporation is acting as a co-manager for the offering.

Boxlight also has granted to the underwriter a 45-day option to purchase up to an additional 2,250,000 shares of common stock, at the public offering price less discounts and commissions.

Boxlight Corporation is headquartered in Lawrenceville, Georgia.

n The UK’s largest private pension fund, the Universities Superannuation Scheme (USS), has more than doubled its deficit to nearly £13 billion at a time when 13 higher education institutions are at risk of collapse.

The USS, which has more than 400,000 members, reported that a gap in funding had widened to £12.9 billion at the end of March from £5.4 billion a year prior.

This largely reflects a fall in interest rates, which are designed

to stimulate global economies ravaged by the Covid-19 pandemic but have an inflationary effect on the cost of defined benefit pension pledges.

“The material reduction in the funding ratio reflects reductions in interest rates over the year and the devastating impact of coronavirus on global markets in the final quarter,” said the annual report.

It was published three weeks after the Institute for Fiscal Studies, a prominent think-tank, produced a report which found that 13 unnamed universities in the UK were at risk of going bankrupt due to Covid-19.

During the 12-month period, the USS’s liabilities – costs of meeting pension provisions – jumped to £79.4 billion from £72.8 billion.

The USS, which owns a stake in London-based private school group Dukes Education, takes an active approach to investing, meaning it selects investment individually rather than injecting capital into instruments like exchange-traded funds, which pool stocks.

The USS places 60% of its funds in equities, 32.5% in fixed income products, 7.5% in property, and 10% in liability-driven investments.

With total assets of £67 billion, the USS is the principal pension scheme for universities and other higher education institutions in the UK. The USS said it would end investments in tobacco, coal and controversial weapons as it moved to build a more ethically orientated portfolio.

n London-based

Moonbug Entertainment has acquired two of the world’s most successful children’s programmes.

CoComelon, a YouTube channel with over 3.5 billion average monthly views help children constructively interact with daily routines, making parents’ lives easier. Blippi is a liveaction programme with, inspiring and accessible educational content, successful toy line, and live shows in the US – and more than half a billion average monthly views.

Renè Rechtman, Moonbug cofounder and chief executive, said: “It is a tremendous accomplishment to acquire two of the world’s most loved children’s shows. We are excited to support their continued growth and expand the brands into global entertainment franchises.

It is a transformational step for our business.”

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GLOBAL: K12

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EducationInvestor Global • July/August 2020

GLOBAL: K12

Herd immunity Valuations of private school assets are set to recalibrate due to the coronavirus conundrum.

But attrition will not be spread evenly across the sector, as school groups will emerge from the pandemic stronger than ever, often at the expense of stand-alone institutions, writes Josh O’Neill

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ow is not a comfortable time to be the proprietor of a stand-alone private school. Consultancy EYParthenon says that the British private school market could shrink by 7% due to the Covid-19 pandemic, putting at risk as many as 180 institutions. More conservative forecasts predict that 100 will be wiped out if a 3% contraction occurs.

Similar predictions are echoed in other parts of the world, as enrolments of international students have fallen sharply while domestic parents have lost jobs and income, spurring transfers of pupils to state schools and cheaper private alternatives. Most at-risk are institutions with relatively low student numbers – think of a family-owned village prep school – and boarding schools whose margins are supplemented by lots of international pupils paying higher fees.

So far, at least 25 British independent schools have folded.

Fast approaching administration, some school owners have drafted in advisors to explore quick-fire sales. With distress and uncertainty plaguing the K12 market, in which valuations have arguably been toppy in recent years, some say that a correction to pricing is inevitable (and perhaps overdue).

While this may be true for some schools, it is certainly not for all. Compelling arguments – and evidence – suggest that while price-to-earnings multiples paid for single-site schools will diminish, valuations of school groups will remain robust.

Ashwin Assomull, a partner at L.E.K. Consulting’s global education practice, says that school groups are better capitalised and have wider access to funding than single-site institutions. This means they are more likely to be comfortable absorbing the kind of losses that could wipe out single-site schools. A shrewd investor will tell you that diversification is key when it comes to picking stocks. The same can be said of private schools and weathering a pandemic.

“Pushed to the wall by Covid, so many single-site schools will be available at lower multiples,” says Assomull, who estimates that the top-eight global private school operators will expand their market share by 5-10% over the next five years, due in part to coronavirus-induced consolidation.

“Even well-reputed family-run schools might struggle to sustain a 10-15% drop in enrolments.

EducationInvestor Global • July/August 2020

“Meanwhile, investors will see that ‘big is beautiful’ amid the distress. There will be a flight to quality. School platforms will become more sought-after, and [price-toearnings] multiples at which they trade will remain strong.”

Evidence supporting this theory can be found in recent transactions.

Singapore’s Canadian International School, which although not technically a group has 3,500 students enrolled across two campuses, was bought in June at the height of the pandemic by China-based operator Maple Leaf for £386 million, equal to 14-times its annual earnings.

Auctioneers had been asking for between 15- and 17-times EBITDA, so, coronavirus considered, the price paid to Southern Capital, the school’s former private equity owner, was enviable.

Premium schools group Inspired Education, whose chief executive this publication interviews on pages 22-25, was valued at ¤3.05 billion – 20-times its EBITDA – on receiving a ¤350 million investment from GIC, a Singaporean sovereign wealth fund, in exchange for a 15% stake. The deal was agreed with terms unchanged in March, by when Inspired’s schools in Italy, Spain, Bahrain, Vietnam, New Zealand, Australia and South Africa had closed down in response to lockdown measures.

Meanwhile, a UK prep school which taught Prime Minister Boris Johnson couldn’t leverage its Eton-feeding credentials to secure a future once the coronavirus infected its balance sheet. Tom Beardmore-Gray, chief executive of the Cothill Trust, which owns Ashdown House, said that he expected the 177-year-old school to be less than a third full come September. “Closing the school is the only remaining option,” he said in June. Hundreds of private school proprietors in the UK – and thousands worldwide – will almost certainly be forced to do the same. That, or offload their cash-strapped schools for the value of the property (if owned outright, that is). It is difficult to run a competitive auction based on a multiple of earnings if they are in – or heading towards – negative territory. If a school lacks tangible assets and simultaneously is undersubscribed, there may not be much of a business to sell.

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GLOBAL: K12

▶ Insulated, but not immune Still, school groups are by no means immune to the financial effects of the coronavirus. Most have eaten into margins by creating hardship funds, issuing refunds and discounts, rolling out new technology and maintaining staff salaries in the face of falling enrolments.

“I don’t know of any school group that won’t take a hit to profits of at least 10-20% this year,” says an M&A advisor to private school proprietors. “Any that say they won’t take a hit are lying.”

Indeed, some schools belonging to groups have already fallen victim to Covid-19. GEMS Education, the United Arab Emirates’ largest private school chain, which is backed by CVC Capital Partners, announced in June that it would close one of its schools in Dubai, which taught 1,500 students. The move came after ratings agency Moody’s downgraded its outlook on the $5 billion operator to ‘negative’, reflecting the risk that the pandemic would negatively affect cash flows and could “jeopardise” GEMS’ ability to reduce its debt burden. Moody’s estimated that GEMS, which runs more than 60 schools worldwide, would require around $40 million of additional working capital this year to cover shortfalls in tuition fees.

Shelter from the storm Despite warnings that some require large sums of cash, it is accepted that school groups are better insulated from economic turbulence than stand-alones. Schools belonging to GEMS, Cognita, Nord Anglia, ISP and Inspired Education, for example, can fall back on shared resources and expertise.

They can learn more quickly from the experience of sister schools in other countries where lockdowns have eased and reopening is permitted. If a school owned by a group is forced to close down, its students can often transfer to a nearby sister school, alleviating some of the social distress imposed on pupils while keeping parents sweet. Groups also tend to have “better marketing and student-recruitment machines”, says Assomull.

Recent corporate ploys by school groups signal a reliance on investors’ confidence in the long-term prospects of the K12 sector. They also highlight the efficiency with which they can raise large sums of money – and at reasonable rates.

In June, Hong Kong-based premium school operator Nord Anglia was reported to be looking to raise ¤150 million of debt via Deutsche Bank, HSBC and J.P. Morgan. According to a source familiar with the group’s strategy, the money would “mainly” be used to fund expansion through acquisitions of schools, many of which will be distressed. Considering the current economic environment, paying interest of 325 basis points – or 3.25% – on notes maturing in four years’ time seems like a pretty good deal for Nord Anglia. Commenting on the premium, one corporate lawyer says: “It’s pretty low, assuming the debt is secured. I bet it won’t be provided by old-school investors.”

In nearby Foshan, China, one of the mainland’s biggest bilingual school operators could be preparing to expand its international footprint. Bright Scholar, which is listed in New York, last year spent nearly £200 million on CATS Colleges, an international network of independent schools, and a pair of private schools in the UK, after taking its first steps outside China in 2018, when it bought Bournemouth Collegiate School on the English south coast. According to Fitch Ratings, Bright Scholar’s finances will “remain solid” despite the pandemic, which, it says, could prompt the organisation to scoop up schools overseas at cheaper-than-usual prices. Fitch notes that Bright Scholar’s cash flow is “particularly strong” and suggests that the group may “seek overseas expansion as more opportunities arise” amid distress.

Bright Scholar and other large Chinese school groups, as well as mainland private investors, will continue to target deals in the UK, experts agree, where most private schools hold charitable status. Some British independent schools that folded either during or before the pandemic have already been resuscitated by Eastern saviours. In April, KSI Education, which is bankrolled by China First Capital, bought Heathfield Knoll in Worcestershire. The same month, a consortium of

Ashwin Assomull, L.E.K. Consulting

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EducationInvestor Global • July/August 2020

GLOBAL: K12

Ross Barfoot, Clyde & Co

Chinese investors acquired a closed-down private school in Staffordshire, with plans to reopen it in due course. According to Venture Education, a China-based consultancy, 17 British schools are now owned by Chinese entities.

Risk premium In certain regions, so-called premium private schools, which charge high fees, could be at greater risk of insolvency and therefore experience significant value erosion.

Dubai, the United Arab Emirates’ biggest city, in which private schools comprise more than three-quarters of the market, is awash with expensive international schools, many of which were operating at low capacity prior to the pandemic. According to local experts, many premium operators had already discounted fees heavily prior to Covid-19 in a bid to increase enrolments. For some, this tactic worked: North London Collegiate School – Dubai more than tripled enrolments to 800 within three years of launching. But for others, further discounts – at a time when enrolments are tumbling as the uncertain futures of expatriate families have prompted many to flee – may not be sustainable. In addition, many premium school operators rent their properties, exacerbating financial risk as buildings cannot be sold off to generate liquidity. Commenting on the post-Covid prospects of half-empty premium schools in Dubai, one local advisor says: “They’re f***ed.”

Ross Barfoot, a UAE-based partner at Clyde & Co, says his law firm has been approached by a number of private equitybacked school operators on the hunt for potential acquisitions at attractive prices. “They’ve got war chests to spend and they are waiting patiently to see whether there are some good assets coming up at good prices. We’re expecting a lot of consolidation and aggregation” – mergers, in other words – “and I think there will be a lot of opportunities to pick up individual sites or small, family-run schools.” In June, two American-curriculum schools in Sharjah announced a tie-up to reduce operational costs – a testament to the economies of scale achieved by clustering schools.

EducationInvestor Global • July/August 2020

John Hayes, Rothschild & Co

Cashing in on consolidation What kind of investors will bankroll – and reap the rewards of – the next wave of consolidation in the private school arena?

Private equity, which is sitting atop a collective $2.5 trillion of ‘dry powder’ – unspent capital – will almost certainly benefit. Buyout funds do not earn fees for managing institutional investors’ money unless they spend it on businesses and later sell them for a profit.

They will continue to be a driving force in the lowerto-mid-market, in which there are countless private equity-backed school operators.

Scaled school groups will continue to fall into the hands of financial sponsors with longer investment horizons and deeper pockets. The bigger an organisation becomes, the harder it is to expand at pace. Therefore, investors seeking to get in and out within five years – as private equity typically does – will struggle to generate satisfactory returns – especially in light of Covid-19, which is widely expected to extend holding periods.

John Hayes, director at Rothschild & Co in Singapore, who advises on education M&A transactions, expects so-called ‘patient’ investors – such as sovereign wealth funds, pension funds and family offices – to increase their exposure to K12 assets in the wake of the pandemic. This would accelerate an existing trend: Cognita is owned by Jacobs Holding, a Swiss family office; Inspired Education is backed by a mix of private equity, sovereign wealth and family office capital; Nord Anglia is co-owned by a Canadian pension fund and Asian buyout group.

“I think there could be a recalibration of long-term investment portfolios to more defensive sectors, like education,” says Hayes. “This opens the door quite nicely for sovereign wealth funds and family offices – and even social infrastructure funds – to do more within the K12 sector.” n

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GLOBAL: EXECUTIVE INTERVIEW

Fever pitch Nadim Nsouli, chief executive and founder of global premium school group Inspired Education, contracted Covid-19 as he was closing the biggest deal of his company’s history. He talks to Josh O’Neill about his close encounter with the coronavirus, its impact on the company, and why there is strength in numbers amid the pandemic

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n February, as schools across the world began closing as Italy, Spain, Bahrain, Vietnam, New Zealand, Australia down to curb the spread of Covid-19, Nadim Nsouli and South Africa had closed down by order of governments. was on the cusp of closing arguably the most important Dealing with complex questions from investors about investment to date in Inspired Education. The founder and performance forecasts was not new to Nsouli, who spent chief executive of the premium private school operator eight years buying, expanding and selling companies for had lined up GIC, a Singaporean sovereign wealth fund, to buyout houses The Gores Group and Providence Equity invest ¤350 million into the group in exchange for a 15% Partners, where he was head of Europe and a senior partner, respectively. Doing so from a hospital bed, however, was stake. The deal would give Inspired an enterprise value of a novel, stressful experience. ¤3.05 billion just seven years after it launched – making it one of the world’s most valuable independent school “I was making myself worse with the stress,” says chains, along with Cognita, GEMS Education and Nord Nsouli. Despite being hospitalised for five days, he worked Anglia. Despite growing warning signs that the coronavirus throughout most of them, sometimes spending “16 hours” crisis was to negatively impact private on calls with, and sending emails to, schools’ revenues, GIC signed off on his lawyers orchestrating the GIC deal. the investment in March, according to He strategised with Inspired’s regional sources. Just three weeks later, however, management teams scattered across five The deal would and Nsouli would be fearful more for continents as an oxygen tank hummed give Inspired an his life than his ability to close the beside him, driving life into his lungs. enterprise value transaction.

“I understood their concerns about the Nsouli chaired a virtual board meeting business – and my health”, which is now of €3.05 billion on 17 March with his investors, at which “perfectly fine”, he says in July, from his just seven years he had been “in bad shape”. A week hideaway in the Bahamas. after it launched later, he had collapsed to the floor of GIC had good reason to fret about the his London home after feeling feverish health of the ship’s captain: sources claim that Nsouli, despite being a minority and short of breath. It was evident that he had likely contracted Covid-19, which shareholder, controls the majority of led him to self-isolate, though he continued to work. But voting rights. Of six seats on Inspired’s board, he controls three, plus the casting vote, insiders say, though he declines on 30 March, Nsouli was rushed to a London hospital by to comment. According to filings with Companies House, ambulance and rigged up to an oxygen tank to support his hampered breathing. At the time, patients infected two of Inspired’s investor board seats are occupied by with the virus who had to be placed in intensive care had Warburg Pincus and TA Associates, two private equity firms that each pumped hundreds of millions of dollars into the an approximately 50% chance of death. Fortunately, he group. The other is now controlled by GIC. According to was not one.

“My health deteriorated extremely quickly,” says Nsouli, sources familiar with Inspired’s shareholder structure, the recalling the frantic period in which “the dominoes were firm’s investors possess few veto rights – a condition at falling fast”, in terms of both his health and schools closing which most buyout funds would baulk – although, again, down. (EducationInvestor Global was informed by sources Nsouli will neither confirm nor comment on this. Investors in Inspired are seemingly betting on his strategic nous and of Nsouli’s ordeal and spoke with him about it via Zoom.)

By late March, most of the group’s schools in countries such have limited say over big decisions.

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EducationInvestor Global • July/August 2020

GLOBAL: EXECUTIVE INTERVIEW

Nadim Nsouli, Inspired Education

EducationInvestor Global • July/August 2020

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GLOBAL: EXECUTIVE INTERVIEW

▶

Like all school proprietors, Nsouli in recent months has had to make difficult choices. Rather than offer a blanket discount on tuition fees, all of Inspired’s schools, some of which charge over £75,000 a year (for boarding in Switzerland), set up hardship funds, to help families whose finances had been hit hardest by the pandemic. The group had “already invested heavily” in technology platforms, so the pivot to distance learning was “straightforward”, says Nsouli. Inspired’s first school closure occurred in Vietnam in early February, which allowed the group’s institutions elsewhere to “quickly learn lessons of best practice”, he says. Pupils follow a normal timetable in which interactive lessons – including sports and music – are delivered live by teachers, who keep regular contact with parents.

Despite a robust digital offering, Inspired – like all school groups – will take a financial hit this year, sources say. The group’s forecasted earnings before interest, tax, depreciation and amortisation (EBITDA) of around ¤150 million will “probably” take a 10-20% hit, estimates one industry insider.

Nsouli will not comment on the private company’s financial affairs, but says that “Inspired will continue to show strong year-on-year growth”, regardless of the impact Covid-19 has on its finances.

GIC’s investment in Inspired underscores a burgeoning trend in which sovereign wealth funds, which manage assets on behalf of governments, and other forms of ‘patient’ capital, from pension funds and family offices, are taking long-term stakes in large education providers. Premium international school operator Nord Anglia is part-owned by a Canadian pension fund, as is global nursery group Busy Bees and private university chain Galileo; Cognita is owned by a Swiss family office. In many cases, such investors are able to commit large sums of money over long time-frames to scaled education businesses because of their sticky revenues.

An all-through school, for instance, could feasibly collect fees three times annually from the same customer for up to 18 years. Plus, K12 is one of the most recession-resilient

educational subsectors: however bad the economic downturn, students will still go to school.

GIC first set its sights on Inspired around four years ago, according to sources, who say it has been pipped to the post on several occasions. In 2017, the $400 billion asset manager lost out to TA Associates. Then, in March 2019 when Inspired had been seeking fresh capital at a ¤2.2 billion valuation, GIC dropped out before the second round of a bidding war that ended with Warburg Pincus paying around ¤350 million for a 20% stake, fending off competition from ADIA, Abu Dhabi’s state-controlled investment fund. GIC declined to comment on information contained in this article.

This time, though, GIC had first-mover advantage as it had already done extensive due diligence on Inspired during previous funding rounds, which enabled it to act quickly and decisively. Its investment, which was reported exclusively

by EducationInvestor Global, saw private equity firm Oakley Capital exit its holding in Inspired, which it bought in 2013 and at its highest point comprised 35%. GIC is expected to remain invested for at least 10 years, though it is understood to have the same exit rights as other investors.

Nsouli declines to comment on earlier funding rounds and the parties involved. Asked whether he is surprised by the willingness of private equity investors, which almost always seek full control of businesses they acquire, to buy into his unusual governance terms, he says: “When I founded Inspired, my key goals were to have control over what is best for the business and not face any pressures on exit – so I didn’t think that private equity was a natural fit at the time. However, we have performed extremely well and have been able to find the right investors to support our long-term plans.

“I truly believe that we have the best combination of blue-chip investors that a company could dream of having: GIC, Warburg Pincus and TA Associates, and two highly respected global family offices, the Oppenheimer family and the Mansour Group.”

Reddam House, Berkshire

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EducationInvestor Global • July/August 2020

GLOBAL: EXECUTIVE INTERVIEW

St George’s International

Inspired was founded in 2013 following its acquisition of South Africa’s Reddam House, an esteemed group of premium private schools set up by educational entrepreneur Graeme Crawford, who remains with Inspired in a senior role. In recent years, Inspired has spent hundreds of millions of dollars hoovering up – and building – prestigious schools in numerous countries, including Spain, Australia, New Zealand, Mexico and Bahrain. It now operates more than 60 worldwide. Inspired tends to target established school brands in affluent areas with wealthy parental bodies and “on average” 1,000 students, most of whom will be locals, not children of expatriates, says Nsouli: “Apart from a handful of our schools, we are a premium group for local kids.” Only 12 of its schools have boarding facilities.

Nsouli says that schools built by Inspired typically become profitable within one-to-three years, compared with the industry average of around four. “We never open a school without using an existing brand,” he says. “If we go into a country and open a new school, we acquire an already successful school and build around it. This allows us to leverage the brand to meet existing demand or create new demand.”

Nsouli’s career in private equity – renowned for its ability to free up cash by eradicating inefficiencies, often at the expense of corporate niceties – set him in good stead for streamlining schools’ operations. “I wasn’t an operator, but I quickly became one,” he says. “We’ve improved the earnings of acquired schools significantly, while at the same time raising the standards of each school we buy across our three ‘pillars’: academics, sports and performing arts.

“I usually buy from founders who are talented, kind and have built successful schools. Great educators who are generally not businesspeople and lack focus on areas such as marketing, finance and HR, and do not have access to global best practices.”

Nsouli heads up a tight-knit management team, several members of which have been poached from blue-chip organisations, such as British Airways and General Electric.

Inspired employs five regional chief executives and four regional education directors, to whom headteachers report.

The company’s cadre of senior managers is smaller than that of some academy trusts. It is far more expensive, of

EducationInvestor Global • July/August 2020

course, but “that’s the value of being in a group: single-site schools couldn’t afford these kinds of people,” says Nsouli.

“They are strong enough to [each] oversee a number of schools, and they add a lot of value on the education and operations fronts.”

But his background in the world of leveraged buyouts has, at times, led people to question his credibility as an educator. He is quick to dismiss such suggestions: “People often assume that I am not an educator, and that I’m some ruthless private equity guy. Well, like any other business owner, I know what my product is: premium education.

We’re charging high fees and we have many competitors.

Therefore, teachers have to be top, heads the best and facilities state of the art. I believe that Inspired has the best school brands in the sector. The results of our top-ranking schools across the world speak for themselves.”

Better together The ongoing pandemic, which has resulted in more than 500,000 deaths and millions of job losses, poses significant threats to private schools worldwide. In the UK, for example, as many as 180 independent schools could be forced to close permanently as a result of Covid-19, according to consultancy EY-Parthenon. In June, we revealed that nine British private schools had announced closures – one of which, King’s College Saint Michaels, was owned by King’s Colleges Group, which Inspired bought last October.

Several schools in a state of financial flux due to Covid-19 have landed on his desk, but “we’ve decided to slow down acquisitions and capital expenditure projects for now to protect the business and staff as no one knows for how long this crisis will last”.

Ultimately, the pandemic will almost certainly push large numbers of struggling single-site private schools to the wall, creating opportunities for large groups like Nsouli’s to consolidate by sweeping up assets at attractive prices. For him, the wide-reaching financial effects of Covid-19 have reinforced the notion that there is strength in numbers: “It’s an uncertain world right now, so it makes a lot of sense to be part of a group with a long-term shareholder base. For our schools, the benefits of being part of Inspired has never been clearer than in the past few months.” n

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GLOBAL: K12

For the many, not the few Ashwin Assomull, partner, L.E.K. Consulting, dissects his organisation’s latest report, commissioned

by Jacobs Foundation, which examines how independent operators across the global K12 market are patching gaps in public provision

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or many years, private education has often been viewed as a choice for only the wealthiest members of society. However, today, private sector provision is growing across all areas of education (from nurseries to schools and higher education) in most major economies, serving children from a wide range of economic backgrounds.

Aside from providing better access, quality, and innovation to the populations it serves, there is a role for the private sector to play in supporting public sector education.

Growth in private education provision Privatisation is no new trend. It has made education, which already ranks among the top ten sectors in the world by gross value addition, the fastest-growing consumer subsector, in terms of spend. K12 education is the largest component for household expenditure, with an estimated $370-390 billion spent globally in 2018 alone.

Growth in private education has been driven by a number of factors. Besides rising household incomes and inadequate public provision – demand for English-based education, the growth of expatriate populations in global urban centers, a focus on student outcomes, and prioritisation of holistic ‘21st century’ education, have all contributed to greater demand for private institutions. Private schools now serve one in four children globally, and in the fast-growing emerging markets such as India, Malaysia, and Brazil, private enrolments far outpace those in public schools.

Private schools for public good While there is no doubt that the sector’s prospects remain undiminished even in the current crisis, private educators have had constantly to defend their value, given that education has traditionally been thought of as a public good.

As a passionate supporter of the private education sector, I was delighted to collaborate with our friends at the Jacobs Foundation on an extensive piece of research that explores the key challenges facing global education and the manner

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in which the private sector is addressing these problems for the benefit of communities the world over.

Although access to basic education has increased rapidly over the past few decades, including emerging markets within Asia and Africa, difficulties still persist. Insufficient supply and funding gaps still pose challenges to universal access, with many marginal groups being kept out of schools even today.

Poor quality is another key issue: insufficient infrastructure and learning materials, a dearth of well-trained school leaders and teachers, outdated or misaligned curriculum, and poor pedagogical approaches are challenges prevalent in many state schools the world over. Moreover, accountability is sorely lacking, with governments and other key stakeholders failing to take full ownership and responsibility for education outcomes.

How can private schools help?

For a better understanding of how private schools can help address some of these problems, we scanned over 1,000 global education models for this report that was commissioned by Jacobs Foundation. We homed in on eight case studies that demonstrate the true value of a socially impact-focused private education institution. The organisations we assessed reported better learning outcomes than government schools.

Applying their learnings to the public sector could vastly improve the quality of education across the board.

Co-chief executive at Jacobs Foundation, Fabio Segura, believes there is no better time to harness the strengths of private school operators to contribute to the greater good.

He says: “Given their increasing relevance in the short and long term, private schools can help address the key issues in global education by creating public good. They can herald change by increasing access, providing affordable, quality education, innovating current learning ecosystems, training personnel in the sector, being accountable for learning outcomes and participating in public-private partnerships.”

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GLOBAL: K12

Whole-school delivery Interestingly, the case studies showed that privately-run schools can actually create value for society along the entire value chain. This tends to happen through three main methods of application, starting with whole-school delivery. In areas underserved by the government, organisations – such as Muktangan, based in India, and The Citizens Foundation (TCF), based in Pakistan – have stepped in to provide free, affordable, quality education. Some of these programmes are aimed particularly at fostering inclusivity and equity, such as Colombia-based Alianza Educativa’s Superaula initiative, which has been specially created for students with learning difficulties. TCF is another good example of an equity-creating model, as the organisation runs all women-schools in some conservative communities to drive girls’ enrolment.

Also, private innovations in curriculum and pedagogy have scope for broader application. At Rising Academies in Liberia, student and teacher feedback is regularly monitored to modify the curriculum, while Alianza’s ‘Navegar Seguero’ curricula helps provide socially relevant content to students from lower economic strata to support their holistic development. In an example of a different pedagogical approach, at Muktangan schools students in the same class are divided into three groups based on their subject aptitude, with instruction tailored to their differing needs.

Privately-run schools also play an important role in training teachers and school leaders. For example, KIPP, a state school chain in the US that is privately-run has its Leadership Design Fellowship, which hosts various summits for teachers and school leaders. In addition to operating 15 free schools, EducAid in Sierra Leone runs teacher-training programmes for community schools including a teacher quality enhancement programme, where it trains partner-school teachers.

Lastly, private institutions can help plug important gaps in infrastructure and technology by sharing school grounds and other facilities in resource-poor settings.

Role of funders and donors Although private institutions can play a critical role in improving public systems, several obstacles still remain. Lack of financial incentives, distrust between public and private sectors, changing regulations and government regimes are barriers, but donors and socially minded foundations can help surmount some of these difficulties.

Segura adds: “The report identifies a course of action for such benefactors. First, donors acting as neutral brokers can help bridge the divide between state and non-state actors through dialogue with state authorities and policy development. Besides helping create regulatory frameworks, donors can lend their support to the creation of quality assurance systems while investing in infrastructure that fosters a conducive ecosystem for local entrepreneurs.

“Foundations and other impact investors can also identify, codify, showcase, and reward best practices and innovations that incentivise the delivery of public good. They could share actionable toolkits for school operators or fund research that advances wider sectoral understanding by monitoring, evaluating programmes and making results public.”

EducationInvestor Global • July/August 2020

The creation of working networks is another space in which intervention is required. Those interviewed by L.E.K. cited the importance of having places where private sector schools and stakeholders, including communities, think tanks, governments, and other actors can come together to collaborate and share knowledge. Funding existing networks or convening new groups, either virtually or in person will both prove beneficial.

Ultimately, donor support can fuel innovation by private sector schools. Grants, prizes for meeting challenges, loans and outcomes-based funding can give privately-run schools the financial security and incentive to generate public good.

One thing to bear in mind is that any such intervention should be prepped for long-term engagement without being too closely aligned with a particular government’s objectives.

Conclusion Addressing persistent problems in the world of education is no easy task and all stakeholders need to be brought to the table. Private institutions can play an important role in reshaping the education sector, but they will need willing partners in the public sector, as well as a supportive regulatory environment that empowers them while also providing checks and balances.

And we will have to hold these ambitious projects to account, with performance closely monitored and measured.

Having identified public-private models that work, we’ll now have to set them up for even greater success with clear delivery targets and more importantly, do the hard work of creating a multitude of them to ensure we are well on our way to meet the lofty and long dreamt of goal of providing quality access to education for all. n

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GLOBAL: BUSINESS WOMEN IN EDUCATION

Tips for start-up success Kate Shand, Business Women in Education founding member and chief executive of Enjoy Education, which she founded, offers her experience of scaling a start-up and explains why challenging the status quo is imperative to growing a business

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he UK has always been a hotbed of creativity and innovation and entrepreneurship is in its citizens’ blood.

The next generation is following closely in step with the current, with more teenagers than ever setting up their own businesses, perhaps inspired by the meteoric rise of technology giants. Increasingly, I meet people who describe themselves as entrepreneurs, founders or chief executives, and they seem to be getting younger and younger.

But founding and running a small company is not easy.

Having a great idea is one thing, but translating that vision into a sustainable, profitable business requires a completely different skill set. Small businesses form the backbone of the UK economy, but a significant number fail.

My journey from start-up to established company has been an exhilarating and at times bumpy ride, but I’ve enjoyed every minute of it. Following a serious back injury that took me out of the working world for an extended period, I reflected on what was important to me, which spawned the seed that would later blossom into Enjoy Education, the tutoring and educational advisory business that I lead.

It started with a mission to transform students into happy, lifelong learners, and has grown from strength to strength into the established education advisory and tutoring business it is today. I’ve learnt a lot over my career; I’ve also made a lot of mistakes, but – importantly – I’ve learnt from them. So, for what it’s worth, here are my key takeaways for any aspiring entrepreneurs out there.

Believe in what you’re doing This may sound like a cliché, but I don’t know any successful entrepreneur who isn’t fired up about what they are trying to achieve.

The reality of starting and running a business can be simultaneously the most exciting and most demanding thing you can ever do in your career. You are the visionary, safety net and final decision-maker – the buck stops with you and the burden of this responsibility is heavy.

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Through good and bad times, I always remind myself of Simon Sinek’s ‘Start with Why’: when you know why you’re doing something – what the ultimate goal is – you remain focused, motivated and inspired. And, importantly, if you’re able to tell people why, they’ll buy into you and what you stand for. For me, building a business that positively impacts the lives of thousands of students is the reason I get out of bed every morning.

Network and consult You don’t have to think everything up from scratch. Surround yourself with as many people as possible and actively seek advice to leverage their experience. Listen.

Continue to build this network of trusted advisors and mentors throughout your career – people you can call on at key moments to bounce ideas off and test your thinking. These relationships can lead you to surprising places and will help you make the very best decisions. Plus, it’s fun. Meeting and talking to people are hands down the best parts of my job.

I’ve made incredible contacts through EducationInvestor Global’s network of Business Women in Education, which connects like-minded, ambitious people, keen to share knowledge and support growth in one another’s careers.

Build diverse teams All businesses have to adapt, reinvent and respond quickly to new opportunities and challenges – more so than ever now, amid the Covid-19 pandemic. But if everyone thinks the same, how can you be sure that you’ve thought about everything you need to and come to the right answer?

In my experience, fostering a diverse team of distinct and confident thinkers is vital for positive transformational change. Diverse teams bring fresh ideas and creative solutions by harnessing people’s varying skills, experiences and backgrounds. Creating a culture of respect and healthy debate is critical to ensure contrasting views are heard and valued.

In short, diversity brings you closer to reality.

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EducationInvestor Global • July/August 2020

Kate Shand, Enjoy Education

EducationInvestor Global • July/August 2020

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EducationInvestor Global

BUSINESS WOMEN

IN EDUCATION

CONTACT US TO JOIN THE NETWORK

Photos from the launch event (04 December 2019)

CONNECTING FEMALE PROFESSIONALS IN THE EDUCATION SPACE

The EIG Business Women in Education Network connects like-minded professionals from all corners of the business of education, including operators, investors and advisors, who believe in the wide-ranging benefits that diversity brings. Our aim is to boost diversity in the business of education and empower women to accelerate their careers.

Business Women in Education will host a number of events, ranging from large networking events to smaller, more targeted events for a selected group of members. This is a platform for members to connect, share insight and engage with others in the business of education.

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ipevents.net/business-women-education

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GLOBAL: BUSINESS WOMEN IN EDUCATION

▶

It’s also important to recognise the value add from every level of the organisation. Some of our most insightful breakthroughs have come from new joiners who disrupt and challenge our ways of working and assumptions, for the better.

they have the right skills to make good judgement calls.

Greater responsibility also makes people’s jobs more motivating. Ultimately, an empowered team frees up your time to focus on other value add activities and achieve a much healthier work-life balance.

Empower your people

What will the future hold for the next

As a founder of a start-up, you are critical to the generation of entrepreneurs? business. Having kids was daunting as When I founded Enjoy Education, social media, smartphones and mobile I struggled to figure out how I would balance children with work. I looked broadband were relatively new. Today with interest at friends in the corporate they are so integral to how we work world with access to long maternity – and one thing is clear, the pace of For me, leadership leaves and the ability to implement an change is accelerating. Over the past is when you few years, we’ve had to respond to more ‘out-of-office’ autoreply. are able to give Then, the lightbulb moment struck. and more changes in technology and control rather Teams often look to leaders to make consumer behavior than ever before. than take control decisions – to be that critical cog in This is exciting. Technology is opening the machine. This doesn’t always make up new possibilities to a wider, more sense. The team is on the front line, diverse population of entrepreneurs. The much closer to the action. This means barriers are coming down and it will be they have the relevant information right harder to stand out from the crowd. The in front of their eyes to make great decisions. At the top, education industry is not immune to this – I’m sure we’ve you rarely have the same level of visibility and, in a small all seen an explosion in new competitors in recent years. business, you can’t be an expert at everything.

Now more than ever, it’s important that we arm students For me, leadership is when you are able to give control with the skills and imagination to be successful in the rather than take control. At Enjoy Education, we obsess rapidly changing world of work. The more we can nurture over devolving decision-making downwards. Empowering and equip children and young adults to challenge the the team means creating a culture of trust and ensuring status quo, the richer our society will be. n

Business Women in Education Network For more information: ipevents.net/ business-womeneducation

Business Women in Education

EducationInvestor Global • July/August 2020

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EUROPE: DISTANCE EDUCATION

Distant future Victoria Giles, corporate finance director at Grant Thornton UK, sets out the driving forces behind consolidation in the e-learning market, for which the Covid-19 pandemic has been a boon

S

lower economic growth from political and Brexit uncertainty hasn’t dampened the resilience of the e-learning sector, with the UK market growing consistently at over 10% per annum in recent years. There is belief within the sector that disruption from the Covid-19 pandemic will simply accelerate long-term growth and stimulate innovation, as providers are well placed to offer value to clients in this period of significant workplace disruption. Further consolidation of the market through M&A activity is also expected to be a key growth driver as providers look to differentiate themselves within an increasingly fragmented market.

Minimal impact on e-learning sector from Covid-19 Our latest research ‘eLearning – navigating a thriving tomorrow’, based on conversations with a number of e-learning providers across the country and our market insight – found that the sector has felt a moderate impact from the Covid-19 pandemic. Most respondents had only taken small mitigating actions in response to the virus, but the impact felt has varied according to provider type.

E-learning providers are focusing on measures to improve their cash flow and manage cost bases, with minimal use of government schemes, while content providers were found to have noted an initial uptick in demand, particularly for off-theshelf content as bespoke content has been harder hit. Platform providers have noted an upswing in inquiries from corporates testing the market for their first learning management system or seeking a more sophisticated solution. It’s no surprise, though, that face-to-face training delivery has plummeted, but some providers did report an increase in discussions with clients to help them move to virtual and digital training.

Drivers for consolidation and growth in the e-learning market As we start to move beyond lockdown and providers start to see how organisations’ new ways of working will either revert or become further embedded, our latest research explores the investment and M&A outlook for the sector. We identified four key drivers behind expected future consolidation: • Attractiveness of the e-learning market; • Increase in digital innovation; • The need for providers to differentiate; • And a focus on international expansion.

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Victoria Giles, Grant Thornton

There are more than 1,000 e-learning providers in the UK, many with revenue below the reporting threshold. This highly fragmented nature makes the sector attractive to entrepreneurs and investors pursuing a range of growth strategies. The market has seen trade players (Learning Technologies Group), pure play equity investors (Apse Capital and Altier Capital) and private equity-backed trade (Access Group) make a renewed push in the sector with acquisitions across 2019 and early 2020, driving deal multiples up.

E-learning assets, particularly those of scale, with inherent technology IP and recurring software as a service (SaaS) and content as a service (CaaS) revenues have had the most competition for investment.

This fragmentation is only expected to increase, with some providers experiencing growth in demand as businesses look to test the water with online platforms. The need for digital and online learning capability has grown and the pandemic will inevitably challenge the delivery of face-to-face training (online training only currently accounts for around 25% of the learning market). We anticipate an increase in digital innovation and a renewed focus on creating a more integrated training and development solution that is tech-enabled and digitally-led.

EducationInvestor Global • July/August 2020

EUROPE: DISTANCE EDUCATION

Online learning use by training topic 100% Compliance IT systems Desktop applications Industry-specific Customer service Interpersonal Management Sales Onboarding Exec development

All online

Mostly online

Some online

A few online

No online

Source: Training Mag ‘2019 Training Industry Report’

Differentiation is key to success

consider, such as platforms that encourage collaboration There will be significant opportunities for or the use of videos and gamification to produce shorter e-learning providers to partner with traditional training learning pieces. providers as differentiation within the sector becomes Demonstrating a return on investment to clients even more critical. Existing providers may look to pivot is also important for all providers, and criticality and adapt their existing offerings online, and therefore helps. Compliance content is critical, as is a learning view M&A as a route to adapt more management system for demonstrating quickly, enable product development, compliance. Outside these areas, and gain market share. Now is the time any platform or product will benefit Content providers that providers can add more value, if it can prove behavioural change can look to and successful players will be using and knowledge transfer, or a direct differentiate this period to invest in adapting their impact on clients’ key KPIs, for products and solutions to address example: increased sales, net promotor themselves by clients’ needs. scores, or reduced time to complete targeting specific Content providers can look to courses. training topics differentiate themselves by targeting The appetite for UK companies or sectors specific training topics or sectors. The to expand internationally will also skills for which clients need training are continue to be a driver of deal activity likely to shift significantly. Compliance, where corporates and workforces need for example, is likely to remain critical, to collaborate and align learning but other skills such as health and safety, leadership strategies globally more so than ever. Providers such and development, and sales and negotiation will also as Learning Pool, Fuse and Learning Technologies Group require a more significant digital transformation. Quality, have all made a start in developing their presence in the engaging and specialist content attracts a premium US, a key market that is also fragmented and ready for and there are several innovative delivery models to further consolidation.

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EducationInvestor Global • July/August 2020

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EUROPE: DISTANCE EDUCATION

Impact range on current trading None/positive impact

None/positive impact

-5%

-10%

-15%

0% -20%

-25% -40%

Blended platform and content provider

High point

Platform provider

Average

Library content provider

-30% -40% -50% Bespoke training provider

Low-point

Source: Grant Thornton survey

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EducationInvestor Global • July/August 2020

EUROPE: DISTANCE EDUCATION

▶ Future of the e-learning market An overwhelming majority of our interview participants were cautiously optimistic about the longer-term prospects of the sector, given the degree of workplace disruption and inevitable training that will be required at all levels to ensure businesses adapt to the ‘new normal’.

Now is the time for organisations to demonstrate their resilience and their adaptability by evolving to meet the new requirements of their clients, which will differ for each provider. Face-to-face providers will need to embrace digital delivery alongside more traditional forms, while content providers will need to partner with the right platform providers and repurpose content for relevance. Failure to understand fully how clients’ needs have evolved and their new ways of working could ultimately lead to many providers’ solutions becoming outdated and potentially replaced.

While for many, the new pipeline of work has unsurprisingly slowed, and sales decisions may be taking a little longer, the wider skills and training industry is expected to remain dynamic, disruptive and in constant evolution, with both investors and corporates continuing to seek strategic acquisitions to diversify.

EducationInvestor Global • July/August 2020

Various acquisition strategies have been pursued and we’ve seen transactions in the e-learning sector that have enabled businesses to: • Form a blended e-learning platform and content solution (for example, Learning Pool (Carlyle owned) and Aliter Capital’s combination of e-learning businesses Bolt and Sponge) • Facilitate access to new sectors and associated client bases (for example, Mapal’s acquisition of hospitality focused e-learning provider Flow Hospitality) • Expand internationally (for example, Learning Technologies Group, Learning Pool and Fuse are all developing their presence in the US) • Increase traditional providers’ approach to blended learning through access to e-learning technology (for example, Emerald Works acquiring MindTools and City & Guilds acquiring Kineo).

We expect this to continue after lockdown ends, as unemployment is expected to peak and differentiation between providers will become even more critical as new entrants use the economic disruption to launch new technological innovation into the market. n

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EUROPE: 10 MINUTES WITH...

1

minutes with…

RJD Partners Private equity firm RJD Partners recently bankrolled the management buyout of Improve International, a provider of training to the veterinary sector. Partner Frank Bulman discusses the deal and the impact of Covid-19 on his fund’s other education and training assets​ First, tell us about the origins of your buyout house, RJD Partners, and its investments to date RJD was founded in 2002 and has raised three institutional buyout funds investing in over 20 private mid-market UK businesses. We focus on specific niches within the broader services space and education and training has been a key focus area for us over a number of years, particularly so in our current fund. We have strong experience and expertise of different delivery models in the sector and have built up a wealth of contacts, which makes us a logical investment partner to consider for transaction sizes between £10 million and £50 million.

RJD owns a language-training and educational travel provider, Voyager, as well as Babington, an apprenticeship provider. Could you set out the impact of the coronavirus pandemic on these companies’ operations – and how they have adapted to meet the shifting demands and needs of learners?

Voyager has not been able to run its language and other educational programmes since mid-March because of the now withdrawn FCO guidance to avoid overseas travel, as well as the ongoing government advice that schools should not run overnight trips or programmes. This is a huge pity for the pupils that will miss out on this educational experience on top of the lost classroom time in 2020. In terms of 2021, Voyager’s customers see their programmes as an integral part of their academic year, so many have already rebooked for 2021. In the meantime, the company has supported its schools’ home-schooling programmes through launching products like its virtual foreign-language escape room.

Since our investment in Babington it has invested heavily

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in its online/blended learning proposition, which has meant that the majority of learning has continued remotely while centres have been closed. The employability side of the business has been impacted by the lockdown restrictions as the majority of learning takes place face-to-face, but is working to move much of this online and we believe the division will be in a position to work with the various government agencies involved in addressing the unfortunate but likely rise in unemployment resultingfrom the crisis.

The government’s agenda remains to grow the number of apprentices in the UK and Babington is well set up to deliver this training going forward.

RJD recently closed its acquisition of Improve International, a provider of professional development training to the veterinary sector. Amid the Covid-19 outbreak, which has prevented in-person instruction for several months and could continue to do so for some time, what attracted your fund to this business?

Improve is a market-leading provider of continuing education to veterinary professionals both in the UK and overseas. The global veterinary services market is supported by strong longterm growth drivers underpinned by increasing consumer spend on companion animals. As a market leader in a growing market where there is strongdemand from vets to upskill through postgraduate qualifications, we believe Improve to be a very attractive investment proposition.

Improve delivers both fully online and face-to-face modular programmes and the pandemic has unsurprisingly impeded the face-to-face delivery side of the business. Classroom learning has largely been delivered through the use of video technologies while practical training has been postponed until next month when it will resume with appropriate

EducationInvestor Global • July/August 2020

EUROPE: 10 MINUTES WITH...

social distancing measures and the use of PPE. We believe this combination of options and the flexibility afforded by its modular programmes will allow Improve to continue to deliver the rich and innovative educational experience that delegates are looking for through an ongoing period of uncertainty.

What percentage of Improve International’s revenues are currently derived from distance learning? And, do you expect this income stream to increase permanently as a result of Covid-19?

Without going into too much detail, fully online programmes currently represent less than 15% of revenue, but weexpect this to increase permanently moving forwards. Delegates are becoming more comfortable with online delivery with some seeing the time and cost savings benefits, particularly if they are travelling from abroad, outweighing the perceived benefits of face-to-face teaching and physical interaction with other students. In the future it really will come down to personal preference and Improve is able to offer its customers both options.

What does the investment thesis underpinning RJD’s buyout of Improve International look like? Will you seek to grow the business organically, or target a roll-up of competitors – or perhaps a combination of both?

We focus on making investments in companies with a growth agenda and Improve has good organic growth potential from further penetration of its existing geographical markets as well as more course development and uptake of its distance learning products. We also have capital set aside to support targeted acquisitions that bringsomething new into the group – whether it be access to a new geographical market or an addition to its product portfolio.

Given that private equity is renowned for its ability to improve the margins of businesses it acquires, often by eradicating inefficiencies (and sometimes jobs), how will RJD look to improve the profitability of Improve International?

RJD Partners is a growth investor and it has backed Improve International to grow its EBITDA in absolute rather than percentage terms. We hope to achieve this objective through revenue growth which will require additional cost being invested in the business, particularly into the distance learning product portfolio. Once the initial investment is made into the product content and format, distance learning programmes can in time be more profitable than face-to-face ones and, if the Improve course mix changes consequently over time, this could ultimately have a positive impact on its profitability.

EducationInvestor Global • July/August 2020

How is RJD navigating the ‘new normal’ in the world of leveraged buyouts?

Clearly Covid-19 has introduced new challenges into investing – both practical ones and because of the uncertain future trading environment. RJD is delighted to have supported the Improve transaction while this has been going on, but we did have the benefit of knowing the business and the management team well prior to the advent of the crisis. This will not be the case with most new investment opportunities, but as physical restrictions ease we expect more activity. Inevitably we wanted to make sure that Improve was very well capitalised to allow it to navigate through an extended period of trading uncertainty during the pandemic, so the transaction was financed without the use of any debt. This is likely to be the case with most private equity transactions currently being funded as lenders and debt investors focus on supporting their portfolio companies.

In the wake of the pandemic, do you think private equity’s role in the education and training sector will change at all? If so, in what ways?

The education and training sector is a very popular sector with private equity investors because many business models are supported by helpful market trends and tend to have a high quality of earnings in terms of revenue visibility, robust margins and cash generation. So I think investment interest will remain strong, but could become more weighted towards transactions which either are required to provide balance sheet support through a period of uncertainty or to accelerate the development of a business, for example through the support of new distancing learning programmes and technologies.

It seems that many private equity-owned companies will have found it difficult – and sometimes impossible – to service the substantial debts on their balance sheets as income has waned and, as a result, could emerge from the pandemic worse-off than publicly- and familyowned counterparts. Do you think this period of disruption, in which revenue visibility has in some cases become limited, has the potential to – and should – bring down the amount of leverage (debt) used in private equity-backed buyouts?

Generally when there is a severe economic shock leverage levels used to fund transactions decline as lenders become more focused on their portfolio than winning new business.

I would not expect this crisis to be any different. I would say though that in general education and training sector companies have robust business models and while interest rates remain at their current levels both higher coupon debt financing and private equity investors will want to remain exposed to the sector. n

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FINANCE: DEALS

deals Afya announces Pebmed’s acquisition COMPANY: Afya Participações TARGET: Pebmed TRANSACTION: Acquisition CONSIDERATION: 132.9 million reais (£20.32 million) Brazilian medical education group Afya has acquired Pebmed, through its wholly-owned subsidiary Afya Participações. Pebmed offers content and clinical decision applications. The net purchase price was 132.9 million reais, with the assumption of estimated net debt of 7.1 million reais, of which 86.8% was paid in cash, and 13.2% was paid in Afya’s stock.

Education value company raises $7.6m COMPANY: AstrumU TRANSACTION: Fundraising CONSIDERATION: $7.6 million AstrumU, a Seattle-based start-up that aims to calculate the value of educational experiences in the labour market has raised funding in a round led by Kingdom Capital, with participation from Heidrick Struggles chairman Adam Warby and DocuSign founder Court Lorenzini. KC Rise Fund and City Light Capital also invested, Geek Wire has reported.

Avanse Financial raises 250 crore rupees COMPANY: Avanse Financial Services TRANSACTION: Fundraising CONSIDERATION: 250 crore rupees (£26.4 million) Warburg Pincus-led Avanse Financial Services has raised funding through the Reserve Bank of India’s targeted long-term repo operation (TLTRO 2.0) and the government’s partial credit guarantee (PCG) scheme, The Economic Times has reported. Avanse Financial Services is an education finance-focused non-banking finance company. It has received 100 crore rupees under the TLTRO 2.0 from public sector banks and 150 crore rupees through PCG scheme.

CampusLogic acquires funding platform COMPANY: CampusLogic TARGET: RaiseMe TRANSACTION: Acquisition CONSIDERATION: Undisclosed Higher education student financial aid company CampusLogic has acquired RaiseMe, a social enterprise focused on expanding access to higher education, especially among low-income and first-generation students. RaiseMe will remain located in San Francisco. CampusLogic is based in Chandler, Arizona.

Canva for Education raises $60m as valuation balloons to $6bn COMPANY: Canva for Education TRANSACTION: Fundraising CONSIDERATION: $60 million Sydney-based ed tech unicorn Canva for Education has raised new funding as its valuation reached $6 billion. Canva enables users to design “anything and publish anywhere” using drag-and-drop tools.

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EducationInvestor Global • July/August 2020

FINANCE: DEALS

Coursera raises $130m COMPANY: Coursera TRANSACTION: Fundraising CONSIDERATION: $130 million Mountain View, California-based Coursera, the learning platform that offers online classes taught by instructors at top universities, has raised funding, Forbes has reported. The round was led by venture firm NEA, with participation from other investors including Kleiner Perkins and G Squared.

Discovery Education acquires Spiral COMPANY: Discovery Education TARGET: Spiral TRANSACTION: Acquisition CONSIDERATION: Undisclosed Discovery Education, a provider of digital curriculum content and professional learning for primary and secondary schools, has acquired Spiral, a platform which supports collaborative learning and formative assessment in the classroom and at home. In the UK Discovery Education is based in Hammersmith, London. Its parent company is located in Charlotte, North Carolina. Spiral is headquartered in east London.

Dragoneer invests $120m in CampusLogic COMPANY: Dragoneer Investment Group TARGET: CampusLogic TRANSACTION: Investment CONSIDERATION: $120 million San Francisco investment company Dragoneer Investment Group has invested in education technology company CampusLogic, Crunchbase has reported. Phoenix-based CampusLogic provides financial tools and resources to help US students understand the processes that can create barriers to student enrolment, engagement and retention.

Vernacular learning platform raises $3.1m COMPANY: Entri TRANSACTION: Fundraising CONSIDERATION: $3.1 million Entri, a Kochi-based start-up has closed a pre-Series A financing round, led by Good Capital, with participation from TN Hari, head of human resources at online grocery start-up BigBasket, and HyperTrack founder Kashyap Deorah, Techcrunch has reported. Entri provides offers upskilling courses, delivered in the language with which they are most comfortable, to help its customers pass exams to secure jobs with state and federal governments in India.

EV Private Equity acquires training platform COMPANY: EV Private Equity TARGET: Trainor TRANSACTION: Acquisition CONSIDERATION: Undisclosed EV Private Equity, which focuses on the energy sector, has acquired a majority stake in Tønsberg-based Trainor, a Norwegian training platform used by the global energy, renewables, power and grid, and maritime industries. EV Private Equity is based in Stavanger, Norway.

KnowFully acquires CME Outfitters COMPANY: KnowFully Learning Group TARGET: CME Outfitters TRANSACTION: Acquisition CONSIDERATION: Undisclosed Wayne, Pennsylvania-based KnowFully Learning Group, a provider of continuing professional education and exam preparation courses to the healthcare, accounting and finance sectors, has acquired Bethesda, Maryland-based CME Outfitters, an accredited provider of continuing medical education.

EducationInvestor Global • July/August 2020

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FINANCE: DEALS

Moonbug Entertainment acquires CoComelon and Blippi COMPANY: Moonbug Entertainment TARGET: CoComelon and Blippi TRANSACTION: Acquisition CONSIDERATION: Undisclosed London-based Moonbug Entertainment has acquired CoComelon and Blippi, two of the world’s most successful children’s educational programmes.

Online art education platform Meishubao raises $40m COMPANY: Meishubao TRANSACTION: Fundraising CONSIDERATION: $40 million Zhejiang-based online painting learning platform Meishubao has completed a Series C+ funding round led by Tencent Holdings, Capital Watch has reported. Shunwei Capital, backed by Hong Kong-listed Xiaomi Corp, Bojia Capital, BlueRun Ventures, Hony Capital, and Welight Capital also participated in the round.

Odilo raises $10m COMPANY: Odilo TRANSACTION: Fundraising CONSIDERATION: $10 million Odilo, a Spanish scale-up with offices around the globe which provides unlimited digital content and collaborative learning services for the personal and professional development of individuals, has closed a financing round.

Permira acquires Chinese division of EF Education First COMPANY: Permira TARGET: EF Kids & Teens TRANSACTION: Acquisition CONSIDERATION: Undisclosed Global investment firm Permira and EF Education First announced that a company backed by the Permira Funds has agreed to acquire a majority stake in the EF Kids & Teens business headquartered in Switzerland with schools in China and Indonesia. EF will retain a significant ownership in the Kids & Teens business.

Rah Rah raises $2.8m in seed funding COMPANY: Rah Rah TRANSACTION: Fundraising CONSIDERATION: $2.8 million New York-headquartered Rah Rah, a community engagement system for higher education, has raised personal seed funding from Workday cofounder and chairman Dave Duffield and Workday vice-chairman Phil Wilmington.

Cybersecurity training firm raises $16m COMPANY: RangeForce TRANSACTION: Fundraising CONSIDERATION: $16 million Manassas, Virginia-based RangeForce, the cloud-based cybersecurity training firm, has raised a Series A round led by Energy Impact Partners.

Paladin Capital Group continues its longstanding support of RangeForce as part of the round which also included existing firm Trind, as well as a new investment from Cisco Investments.

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EducationInvestor Global • July/August 2020

FINANCE: DEALS

Riiid closes $41.8m funding round COMPANY: Riiid TRANSACTION: Fundraising CONSIDERATION: $41.8 million Seoul-based Riiid, an AI education solutions start-up has secured a pre-Series D funding round, including investment from the state-run Korea Development Bank, Nvestor, Intervest, as well as from existing investor IMM Investment.

Laureate Education offloads Australasian portfolio for $643m COMPANY: Strategic Education TARGET: Torrens University Australia, Think Education and Media Design School TRANSACTION: Acquisition CONSIDERATION: US$643 million Baltimore, Maryland-based Laureate Education has sold its Australia and New Zealand portfolio to Strategic Education, as the private university operator continues its divestment strategy. The all-cash transaction will see Herndon, Virginia-based Strategic Education take control of Torrens University Australia, Think Education and Media Design School.

Stride Funding secures additional capital COMPANY: Stride Funding TRANSACTION: Fundraising CONSIDERATION: Undisclosed San Francisco-based education funding start-up, Stride Funding has raised additional venture funding and has secured additional investment capital for its Income Share Agreement (ISA) Fund. The new round of venture funding was led by New U Venture Partners, anchored by Western Governors University, while the ISA investment capital was committed by multibillion-dollar impact investors.

Second language firm raises $4.5m COMPANY: Tandem TRANSACTION: Fundraising CONSIDERATION: £4.5 million Berlin-based start-up Tandem, an app for practising a second language, has closed a funding round led by European venture capital firm Brighteye Ventures, with participation by Trind Ventures, Rubylight and GPS Ventures, TechCrunch has reported.

TeleTeachers closes Series A COMPANY: TeleTeachers TRANSACTION: Fundraising CONSIDERATION: $2.8 million Chicago-based TeleTeachers, a provider of technology-enabled learning and therapy solutions has completed a $2,785,000 Series A equity private placement, with lead investors Seyen Capital’s senior managing director George Spencer and Jerry Putnam (founder of Archipelago Holdings, and former chairman of OptionsHouse and president of the New York Stock Exchange).

Toppr raises $46m COMPANY: Tandem TRANSACTION: Fundraising CONSIDERATION: $46 million Toppr, a Mumbai-based online learning start-up, has secured a Series D funding round led by Foundation Holdings, with participation by existing investor Kaizen Private Equity, Techcrunch has reported.

EducationInvestor Global • July/August 2020

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FINANCE: DEALS

Vedantu co-founder’s ed tech start-up raises seed funding COMPANY: Trulearn Spaces TRANSACTION: Fundraising CONSIDERATION: Undisclosed Trulearn Spaces, which operates Bengaluru-based children-focused ed tech start-up Uable, has raised a sum as part of its seed funding round, VC Circle has reported. The round in Uable was led by early-stage venture capital firm 3one4 Capital, with participation from Global Founders Capital, Inflection Point Ventures, AngelList, as well as angel investors including Amrish Rau and Jitendra Gupta.

UWorld acquires online bar exam prep firm COMPANY: UWorld TARGET: Themis Bar Review TRANSACTION: Acquisition CONSIDERATION: Undisclosed Online exam preparation company UWorld, has acquired Themis Bar Review, which provides online bar review courses. UWorld is based in Dallas; Themis Bar Review is headquartered in Chicago

Vedantu raises $100m in Series D funding COMPANY: Vedantu TRANSACTION: Fundraising CONSIDERATION: $100 million Vedantu, a live online tutoring company based in Bengaluru, has raised funding as part of a Series D round, led by New York-based investment firm Coatue, with participation from existing investors. The Rainmaker Group acted as the exclusive financial advisor to Vedantu on its fundraising.

Weld North Education acquires social emotional learning curriculum company COMPANY: Weld North Education TARGET: Purpose Prep TRANSACTION: Acquisition CONSIDERATION: Undisclosed Weld North Education (WNE), a K12 digital curriculum company has acquired Purpose Prep, a technology-based online course provider focused on social and emotional learning. WNE and Edgenuity are based in Scottsdale, Arizona; Purpose Prep is headquartered in Clawson, Michigan.

Ed tech platform Your Favourite Teacher raises capital COMPANY: Your Favourite Teacher TRANSACTION: Fundraising CONSIDERATION: Undisclosed Ed tech platform Your Favourite Teacher (YFT) is raising capital to expand its operations through Growthdeck, the private equity investment firm. YFT is a virtual classroom for GCSE students, which augments and supports the existing Key Stage 4 curriculum with rich video content, automated marking and pupil performance tracking.

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EducationInvestor Global • July/August 2020

FINANCE: RESULTS

company results 2U Lanham, Maryland-based 2U is an education technology company.

PERIOD COVERED: Second quarter of 2020, ending 30 June 2020 NET LOSS:

($66.2 million)

L

2019: ($28 million)

REVENUE:

$182.7 million

+34.8%

2019: $135.5 million

HIGHLIGHTS: • The company also reported results for the first six months of 2020. Its net loss for the period was $126.3 million, compared to net income of $49.5 million reported for the first six months of 2019.

• Revenue for the six-month period was $358.2 million, up from $257.7 million reported for the first six months of 2019.

2U co-founder and chief executive Christopher Paucek: “As universities accelerate their digital transformations and more students affirmatively choose to pursue an education online, we believe our strong relationships with leading universities and the unmatched scale and quality of our portfolio of offerings position us well for future growth.”

American Campus Communities Austin, Texas-based American Campus Communities is a publicly-traded real estate investment trust that invests in dormitory housing.

PERIOD COVERED: Second quarter of 2020, ending 30 June COMPREHENSIVE LOSS/INCOME:

($13.1 million)

L

2019: $10.4 million

REVENUE:

$185.5 million

–14.7%

2019: $217.4 million

HIGHLIGHTS: • The company also reported results for the first six months of 2020. Comprehensive income for the period was $60 million, up from $25.6 million in comprehensive income reported for the first six months of 2019.

• Revenue for the six-month period was $435 million, down from $459.5 million reported for the first six months of 2019.

American Campus Communities chief executive Bill Bayless: “As we expected and communicated on the last earnings call, this quarter was significantly impacted by the short-term financial impacts of the Covid pandemic, largely driven by our commitment to responsibly manage our business with compassion towards those residents and families who need financial assistance during these challenging times, with nearly $24 million in financial relief given during the quarter.”

EducationInvestor Global • July/August 2020

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FINANCE: RESULTS

Barnes & Noble Education Basking Ridge, New Jersey-based Barnes & Noble Education provides educational products and services for higher education and K12.

PERIOD COVERED: Fiscal year 2020, ending 2 May 2020 NET LOSS: TOTAL SALES:

($38.25 million)

L

2019: ($24.4 million)

$1.85 billion

–7.5%

2019: $2 billion

HIGHLIGHTS: • The company also reported results for the fourth quarter of its 2020 fiscal year. Its net income was $40.3 million, compared to a net loss of $46.2 million reported for Q4 2019.

• The total sales figure for the quarter was $256.9 million, down from $334.4 million reported for the fourth quarter of fiscal year 2019.

Barnes & Noble Education chairman and chief executive Michael P Huseby: “As we entered the fourth quarter of fiscal year 2020, we had achieved significant positive progress and market momentum on each of our key strategic initiatives: winning new business to increase our scale; First Day and First Day Complete inclusive access courseware models; the imminent release of our new eCommerce platform to grow general merchandise sales; and the increased awareness and growth of bartleby, our digital self-study platform.”

Bright Scholar Education Holdings Foshan-based Bright Scholar Education Holdings is an international and bilingual K12 school operator.

PERIOD COVERED: Third quarter of its 2020 fiscal year, ending 31 May 2020 NET INCOME:

¥68 million (£7.58 million)

–50.5%

2019: ¥137.4 million

REVENUE:

¥739.4 million

+6.7%

2019: ¥692.8 million

HIGHLIGHTS: • The company also reported results for the nine months ending 31 May 2020. Net income for the period was ¥312.8 million, up from ¥300.9 million for the same period in fiscal year 2019.

• Revenue for the nine months was ¥2.71 billion, up from ¥1.85 billion reported for the same period in fiscal year 2019.

Bright Scholar executive vice-chairman Jerry He: “Despite disruptions and short-term impact from the Covid-19 pandemic, Bright Scholar’s performance during the third fiscal quarter has demonstrated our continued progress in executing our growth strategy and highlighted the resilience of our underlying business.”

44

EducationInvestor Global • July/August 2020

FINANCE: RESULTS

Navient Wilmington, Delaware-based Navient is a student loans servicing and collecting company.

PERIOD COVERED: Second quarter of 2020, ending 30 June 2020 GAAP NET INCOME:

$125 million

–18.3%

2019: $153 million

Navient president and chief executive Jack Remondi: “The Covid-19 crisis continues to challenge our nation, customers and clients. We have actively responded to the needs of the people we serve, providing immediate payment relief options to more than six million borrowers and assisting states in implementing important programmes to benefit their residents.”

New Oriental Education & Technology Group Beijing-based New Oriental Education & Technology Group is a large private educational services provider in China.

PERIOD COVERED: 2020 fiscal year, ending 31 May 2020 NET INCOME: REVENUE:

$413.3 million

+73.6%

2019: $238.1 million

$3.58 billion

+15.5%

2019: $3.1 billion

HIGHLIGHTS: • The company also reported results for the fourth quarter of its fiscal year 2020, ending 31 May 2020. Net income for the period was $13.2 million, down from $43.2 million reported for the fourth quarter of 2019.

• Revenue for the quarter was $798.5 million, down from $842.9 million reported for Q4 2019.

New Oriental’s executive chairman Michael Yu: “As we guided in the previous quarter, the outbreak of Covid-19 pandemics around the globe starting from March posed continuing pressure on our key business lines. We saw challenges on acquiring new customers during the pandemics, and the enrolment for summer courses has also been delayed.”

EducationInvestor Global • July/August 2020

45

FINANCE: RESULTS

Sallie Mae Newark, Delaware-based Sallie Mae is a saving, planning, and paying for college company.

PERIOD COVERED: Second quarter ending 30 June 2020 NET LOSS/INCOME:

($85 million)

L

2019: $150 million

HIGHLIGHTS: • The company reported private education loan originations of $497 million, down 7% on Q2 2019.

Sallie Mae chief executive Jonathan Witter: “While the pandemic has changed much of the world around us, students and families remain determined to pursue a higher education. Still, many have delayed their decision for how to pay for it as they grapple with the effects of the current economic environment: families have lower disposable income and a greater desire to hold on to assets, and public institutions have increased prices in response to reduced state subsidies.”

Scholastic Corporation Manhattan-based Scholastic Corporation is a global children’s publishing, education and media company.

PERIOD COVERED: 2020 fiscal year, ending 31 May 2020 NET LOSS/INCOME: REVENUE:

($43.8 million)

L

2019: $15.6 million

$1.49 billion

–9.7%

2019: $1.65 billion

HIGHLIGHTS: • The company also reported results for the three months ending 31 May 2020. Its net loss for the period was $13 million, compared to net income of $17.9 million reported for the three months ending 31 May 2019.

• Revenue for the three-month period was $284 million, down from $470.7 million reported for the three months ending 31 May 2019.

Scholastic Corporation, president, chairman, and chief executive Richard Robinson: “In the fourth quarter, we took decisive action to mitigate the impact of Covid-19 on our operating income and cash flow, while continuing to support schools, teachers, parents and children as schools were closed in the US and globally.”

46

EducationInvestor Global • July/August 2020

FINANCE: RESULTS

Strategic Education Strategic Education Inc (SEI) is a working adult education company which owns for-profit online Strayer University and Capella University.

PERIOD COVERED: Second quarter ending 30 June 2020 NET INCOME: REVENUE:

$34.2 million

+40.2%

2019: $24.4 million

$255.8 million

+4.4%

2019: $245.1 million

HIGHLIGHTS: • The company also announced results for the first six months of 2020, reporting net income of $69.4 million, compared to net income of $35.9 million reported for the first six months of 2019.

• Revenue for period was $521.1 million, up from $491.6 million reported for the first six months of 2019.

SEI chief executive Karl McDonnell: “As our organisation continues to adapt to the challenges presented by the Covid-19 pandemic, we remain focused on maintaining the highest level of educational quality and access while investing in strategies and opportunities to support our mission of advancing career and economic mobility for all.”

TAL Education Group TAL Education Group is a Beijing-based after-school tuition provider.

PERIOD COVERED: First quarter of its 2021 fiscal year, ending 31 May 2020 NET INCOME/LOSS: NET REVENUE:

$81.65 million

P

2020: ($16.16 million)

$910.66 million

+35.2%

2020: $673.41 million

HIGHLIGHTS: • Total student enrolments of normal priced long-term course increased by 72.1% year-on-year to approximately 2.95 million from approximately 1.72 million in the same period of the prior year.

• Total physical network increased from 871 learning centres in 70 cities as of 29 February 2020 to 936 learning centres in 90 cities as of 31 May 2020.

TAL’s chief financial officer Rong Luo: “The first fiscal quarter revenue results were driven by a solid performance of online courses and the healthy growth of Xueersi Peiyou business.

Our offline business may still face some continued pressure due to the Covid-19 outbreak, but as progress is made in containing the spread of Covid-19, we are working on the gradual resumption of our offline activities across different business segments.”

EducationInvestor Global • July/August 2020

47

EXECUTIVE MOVES

executive moves Aspen New York-headquartered education technology holding company Aspen has appointed Doug Kass and Mike Koehneman to its board, while Malcolm MacLean IV has resigned.

Kass will serve on the regulatory committee, and Koehneman will serve on the audit committee and corporate governance committee. Aspen’s total board membership is now eight, with six independent directors.

Kass is a board member of MVC Capital and is the founder and president of Seabreeze Partners Management, a privately-owned hedge fund sponsor. He has more than 45 years of experience with various investment firms. He began his career as an analyst at Kidder Peabody and spent nearly a decade at Putnam Management as an analyst and economist. He was a member of the board of directors of Empire Resources, a distributor of value-added, semi-finished metal products, from 2011 until 2017, when it was acquired by Ta Chen Stainless Pipe Co. Koehneman was global advisory chief operating officer and human capital leader at PwC, where he led worldwide operations for the advisory business, overseeing 50,000 professionals. He

48

was previously US advisory operations leader responsible for oversight of advisory’s services for PwC, including business unit performance, finance, investments, human resources, acquisitions, and administration. Previously at PwC, he was the lead engagement partner for financial statement audits and internal control and security reviews. Koehneman is a CPA.

Barnes & Noble Education Barnes & Noble Education, the provider of educational products and services for higher education and K12, has appointed Lowell W Robinson to its board as an independent director and as a member of the board’s audit committee.

Robinson has significant public company board experience, including in the education sector. He is an experienced digital, education, and turnaround and M&A executive. He has served as a member of the board of Medley Capital Corporation since 2018, where he sits on the audit committee and special committee of the board.

He previously served on the board of Aratana Therapeutics from 2018 until its sale to Elanco

in 2019. He also previously served on the board of Evine from 2014 to 2018 where he was chairman of the audit committee and served on the finance committee. He also served on the board of HigherOne, a fintech education services company, from 2014 until its sale in 2016, where he chaired the audit committee and was on the risk management committee.

From 2006-2009 Robinson was chief financial officer and chief operating officer of Miva, a digital marketing company. He was on the board of Edison Schools from 2002 to 2004, where he chaired the audit committee and was lead director; while on the board of Edison Schools, he was interim chief financial officer for NYU Polytechnic. From 2000 to 2002, he served as senior vice-president and chief financial officer of HotJobs, which was acquired by Yahoo.

Robinson has also served on the board of the University of Wisconsin Business School, the Council for Economic Education, the University of Wisconsin Economics Department, the Harvard Business School Club of New York, and the New York Academy of Sciences.

Barnes & Noble Education is based in Basking Ridge, New Jersey.

EducationInvestor Global • July/August 2020

EXECUTIVE MOVES

Frontline Education

Nelnet Campus Commerce

Frontline Education, a provider of K12 school administration software, has appointed Victoria Silbey as chief legal officer.

Silbey has more than 25 years’ legal experience and will be responsible for legal, corporate governance, compliance matters and human resources as part of Frontline’s executive team.

Silbey was previously senior vice-president, chief legal officer, chief compliance officer and corporate secretary at Laureate Education. Before that, she was chief legal officer and senior vicepresident at SunGard Data Systems (now part of FIS Global) and served as a litigation attorney at law firm Morgan, Lewis & Bockius.

Silbey will be based at the company’s headquarters in Malvern, Pennsylvania.

Nelnet Campus Commerce, a division of Nelnet, which provides secure payment technology in higher education, appointed Jackie Strohbehn as president, effective 1 August.

Strohbehn was recently regional sales director of the west region for Nelnet Campus Commerce.

Strohbehn has held customer-focused roles in both higher education and financial markets.

She joined Nelnet in 2016 spending the past four years leading the sales team in the western half of the US. Before that she worked at Oracle as an enterprise application manager focused on PeopleSoft and Oracle Cloud solutions.

Strohbehn will report directly to DeeAnn Wenger, president of Nelnet Business Services.

Nelnet Campus Commerce is based in Lincoln, Nebraska.

Ken42 Bangalore-based ed tech app platform Ken42 has appointed Sasi Kumar Sundararajan as its advisor, Indianweb2 has reported.

Sundararajan has 23 years’ experience with PwC, Deloitte and EY as practice leader covering public, government and private sector consulting in growth, restructuring, investments, technology and capacity building across several sectors in India, Sri Lanka, Bhutan, Bangladesh, the Middle-East and the Gulf Cooperation Council.

He has also been a guide, mentor and advisor to start-ups, incubators, accelerators, private equity funds and universities.

Meten EdtechX Meten EdtechX Education Group, an Englishlanguage training provider in China, has appointed Henry Wong as chief financial officer, succeeding Ricky Ng, who has stepped down to pursue other opportunities.

Wong has more than 27 years’ experience in corporate finance, accounting, internal control, and corporate governance across international markets including mainland China, Hong Kong, Singapore, London, Japan and the US. He is an independent director of Hong Kong-listed Shifang Holding Company and Raffles Interior.

He was previously chief financial officer of CITIC Frontier Services Group, a Hong Konglisted group with international subsidiaries and projects across airlines, logistics and insurance sectors.

Wong has also held senior finance and internal audit positions for multinational companies listed in the US, Demark, Japan, Hong Kong and China. As a chartered accountant, he spent more than 11 years in senior roles at Deloitte, Touche Tohmatsu and PwC.

EducationInvestor Global • July/August 2020

Showbie Showbie, which provides software as a service solutions for hybrid learning in K12 and higher education, has appointed Abdul Chohan as vice-president learning to oversee the expansion of Showbie’s professional development, training, and implementation services offered to schools and districts.

Chohan has experience helping organisations globally to design their digital strategy and assisting teachers in using technology. He is the director of audio/video and IT integration firm ThinkSimple, founder of a free school in the UK, and a former chief executive of a multi-academy trust in the UK Showbie is based in Edmonton, Alberta.

St. Thomas University Private Catholic St. Thomas University in Miami Gardens, Florida has appointed Mark Apple as vice-president of marketing and communications, to oversee all aspects of the university’s communications strategy, media relations, marketing, social media, branding, and public relations.

Apple has experience of marketing and communications in both higher education and the corporate sector. Most recently, he was vice-president for marketing communications at Marian University in Indianapolis, Indiana, where he led a team in content generation, paid advertising, social media outreach, internal university communications, print collateral, event marketing, and crisis communications.

Before that, he was director of public relations at Harrison College in Indianapolis, and for more than 10 years was regional vice-president, communications and public affairs, at Comcast - Indianapolis region. He was also a business

development executive at Indianapolis Motor Speedway.

St. Thomas offers 39 undergraduate, graduate, and postgraduate degrees at its 144-acre campus.

The American University of Bahrain The American University of Bahrain (AUBH) has appointed William D Hurt as chief operating officer.

Hurt has more than 10 years of regional operational and strategic experience and will oversee all business operations and development for AUBH. He began his career as a management consultant in the US and worked for clients in a variety of sectors including education, defence, and pharmaceuticals.

He focused on solving complex financial and procurement challenges in a variety of transactional and operational contexts, often bringing businesses out of crisis, or through developmental stages.

Hurt was previously managing director of Middle East Operations for US-based Laureate Education, where he helped develop from startup and lead eight educational institutions across Saudi Arabia and their shared service offices in Riyadh and Dubai. In addition, he has worked on educational projects in Morocco, Egypt, Jordan, Oman, the UAE, and Lebanon.

Vector Solutions Vector Solutions, an e-learning and performance support solutions company, has appointed Tommy Richardson as chief technology officer to lead the company’s IT and infrastructure systems and operations.

Richardson has more than 20 years’ experience focusing on large-scale software as a service and business process outsourcing mission critical systems.

Richardson was previously chief operating officer, chief technology officer, and senior vice-president of product at Nextech Systems, where he was responsible for the technology, product, and support organisations. Before that, he held chief technology officer roles at Teradata Marketing Applications and Siemens Healthcare. He also held similar chief technology officer positions at Automated Data Processing, Stardata Technologies, and Ricochet Systems. At these companies, he led large migrations from enterprise to SaaS architectures, M&A of new technologies and products, and development of new scalable cloud offerings.

Vector Solutions is headquartered in Tampa, Florida. n

49

November/December 2019 Volume 18 Number 6

NURSERY MANAGEMENT TODAY

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