[ad_1]
A US private equity company is taking a €1bn stake in an operator of schools around the world, as investors eye rising global demand for private education bouncing back from disruption caused by coronavirus.
Stonepeak, a $46bn investment firm focused on transport and communications infrastructure, will acquire a minority shareholding in Inspired Education, a UK-based company that runs more than 70 fee-paying kindergarten, primary and secondary schools across five continents.
Inspired, launched in 2013 by Nadim Nsouli, a former investment banker and private equity investor, owns or holds long leases on schools in 20 countries teaching more than 55,000 mainly local students and employing about 7,000 staff.
It is one of a number of corporate operators of private schools, like Nord Anglia, Cognita and GEMS, which are tapping into demand from both expatriates and a rising domestic middle class in fast-emerging economies.
Although some students dropped out of private education in the early months of the pandemic, Nsouli told the Financial Times that most had since returned. His focus on teaching local families rather than expatriates meant pupils were typically enrolled in his schools for eight to 10 years.
James Wyper, senior managing director at Stonepeak, said the “significant minority” investment in the company was the first of a number that the firm was considering in the sector, including in pre-primary, higher education, technology and in geographies beyond those covered by Inspired.
“With high barriers to entry, durable cash flows and a churn of students of 10 per cent a year, it’s hard to not see how education fits pretty squarely in the centre for us,” he said.
Inspired has significant business in Spain, Italy and South Africa, and has expanded in regions including Latin America. Following the shift to hybrid and remote learning during the pandemic, it has also launched an online school offering the International Baccalaureate.
In contrast to some rivals, it has avoided acquisitions in China. Other foreign school operators are seeking to capitalise on interest in international-style education, but where the authorities have imposed heavy additional restrictions in recent months.
Ashwin Assomull, a partner in the education practice at LEK Consulting, said that private school education was growing rapidly around the world, with more than 85mn students in the leading markets, and likely to generate more than $4.5tn in annual revenues by 2030.
Alongside Nsouli and other company executives, Inspired’s shareholders include GIC, Singapore’s sovereign wealth fund, as well as TA Associates, Warburg Pincus and the Oppenheimer and Mansour family offices.
In the year to August 31, Inspired reported pre-tax profits of €40mn on sales of €528mn. Earnings before interest, taxes, depreciation and amortisation were €161mn. It had net assets of €565mn and borrowings of €846mn.
[ad_2]
Source link
