Private equity investors weigh exit from UAE school operator GEMS-sources
By Dasha Afanasieva, Saeed Azhar and Stanley Carvalho
LONDON/DUBAI/ABU DHABI, Sept 24 (Reuters) - A group of
private equity investors, including Fajr Capital, Blackstone
and Bahrain's Mumtalakat, is weighing the sale of their
combined stake in the emerging market business of UAE-based GEMS
Education, three sources said.
The consortium has held preliminary talks with investors
about an outright sale of the more than 20 percent stake after
GEMS shelved its plan to list the schools operator in London,
which deprived them of an exit in their more than four-year old
investment, the sources familiar with the talks said.
The stake is valued at about $1 billion, two of the sources
The sources declined to be identified because the sale talks
are not public.
Dubai-based Fajr Capital led the consortium's bid to take a
a significant minority stake in GEMS Education's business in
2014, covering the Middle East, North Africa and East Asia.
The valuation for the deal and the stake size was not
disclosed at that time.
Bahrain Mumtalakat Holding, the investment arm of the
Kingdom of Bahrain, and Blackstone were the other partners in
A GEMS Education spokesman said in an email that it does not
comment on rumours or speculation. Fajr Capital, Blackstone and
Mumtalakat also declined comment.
GEMS is majority-owned by UAE-based Varkey Group, which has
interests in education, healthcare, construction and facilities
The plan to list GEMS in London was shelved after
authorities in Dubai unexpectedly decided to freeze tuition
fees, meaning the company's financial forecasts had to be
adjusted, Reuters reported in July.
Bankers have estimated GEMS would have garnered a market
capitalisation of around $4.5-$5 billion.
According to the latest trading update of GEMS MENASA, whose
stake is for sale, it had 120,000 enrolments in 48 schools in
the region. It generated revenues of between $1 billion and
$1.02 billion in the financial year that ended in August and
EBITDA of between $275 million and $285 million. (https://bit.ly/2puSsIK)
(Additional reporting by Tom Arnold and Hadeel Al Sayegh,
editing by Louise Heavens)
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