A consortium led by CVC Strategic Opportunities Fund I and Fund II, with co-investors has entered into a binding agreement, to sell its majority stake in GEMS Education to a consortium led by Brookfield Asset Management.

 

GEMS Education has grown from a single school, following the 1959 arrival of the founding Varkey family to Dubai as teachers, to become the world's largest provider of private K-12 education. In the five years since CVC Consortium’s original investment, GEMS has performed well, successfully navigating Covid-19 disruptions, to increase student numbers from ~125k to ~140k.

 

CVC established its Strategic Opportunities strategy in 2014 to invest in high-quality, stable businesses that operate in low-volatility sectors, partnering with founding families or foundations looking for a long-term partner.

 

Investing further

Özgür Önder, Senior Managing Director and Head of Middle East, CVC, said: “It has been a privilege to support GEMS as the leading provider of world-class education in the UAE. GEMS was CVC’s first private equity investment in the Middle East and we remain fully committed to investing further in this attractive region.”

 

Osama Nahhat, Managing Director, CVC Strategic Opportunities, added: “GEMS is an exceptional business with a longstanding legacy, an outstanding management team, first-rate academic provision and a unique place in the UAE education ecosystem. We look forward to its continued success in this new chapter.”

 

Dino Varkey, Group CEO, GEMS, said: “Providing a truly world-class education is our singular purpose at GEMS Education. Our impact in the world today has never been stronger, and that has been made possible by our exceptional team. We are well-positioned for future growth, thanks to a supportive operating environment that is driving record enrolments, underpinned by a strong UAE economy and a growing population. We thank CVC for their support since 2019, helping GEMS navigate through the Covid pandemic, and supporting management to bring GEMS to the strong position it is in today.”

 

Financing commitments

GEMS has simultaneously secured financing commitments from a consortium of UAE banks to finance the transaction, including funding the repayment of GEMS’ existing financing arrangements.

 

Completion of the transaction is conditional on the Brookfield consortium satisfying certain conditions by late June 2024, and is expected to take place in Q3 2024. 

 

As part of the transaction, CVC Consortium will retain a stake in the company and welcome Brookfield as new shareholders. The company’s existing minority shareholders, including Khazanah Nasional Berhad, will exit as part of this transaction.

 

Holders of GEMS MENASA Cayman Ltd Senior Secured Notes should note that this statement does not constitute a formal notice of redemption. GMCL will confirm details of the refinancing upon the transaction becoming unconditional, but note that repayment will be effected no earlier than July 31, 2024.--TradeArabia News Service