The Canada Pension Plan Investment Board and an Asia-based private equity firm have signed a deal to acquire an international operator of private schools.
The transaction values Hong Kong-based Nord Anglia Education Inc. at about $5.9 billion, including debt repayment. Nord Anglia has 43 schools that teach 37,000 students from kindergarten through to the end of high school in China, Europe, the Middle East, North America and Southeast Asia. The CPPIB is taking the company private through an agreement with Baring Private Equity Asia to purchase all outstanding shares.
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Nord Anglia is the CPPIB’s first direct equity investment in private education, according to Deborah Orida, managing director and head of private equity for Asia at the pension fund. “This investment in Nord Anglia is an excellent fit with our strategy to build a diversified portfolio capable of delivering strong, sustainable returns to the Canada Pension Plan Fund over the long term.
“The company, backed by a strong management team, is well positioned to benefit from the rising demand for high-quality education in the kindergarten to Grade 12 category globally, has demonstrated strong financial performance, delivers stable cash flows and provides a platform for future growth in this sector.”
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Baring Private Equity Asia owns 67 per cent of Nord Anglia, and its affiliated funds have been investors since August 2008, when they completed a previous privatization transaction with company management.
“After nine years, we have developed a thorough understanding of the business and have high conviction that Nord Anglia’s future is even more promising than its past,” said Jean Eric Salata, founding partner and chief executive officer at Baring Private Equity Asia.
“CPPIB is a partner that we know well and that shares our belief in the education sector and specifically Nord Anglia as a global leader in education. We look forward to growing Nord Anglia together.”
The transaction is subject to shareholder approval and customary closing conditions.