LEAN, GREENE ACQUISITION MACHINE: Rumour Has It can reveal that KSI Education, the UK-based private school operator, has acquired Greene’s, “Oxford’s oldest tutorial college”. Filings with Companies House show that KSI – which is bankrolled by China First Capital, a Hong Kong-listed investment bank – took a majority stake in Greene’s on 3 February. The terms of the transaction are unclear. The deal will see Greene’s, founded in 1967 by Oxford classics graduate Edward Greene, join Heathfield Knoll School and Kingsley School Bideford under the KSI umbrella. The takeover is KSI’s second in the past 10 months, suggesting that the pandemic has failed to dampen its appetite for acquisitions, even in hard-hit segments such as in-person tutoring.
KICK BACK AND RELAX – IT’LL ALL BE OVER SOON… Rumour Has It brings you a mini-scoop that SofaTutor, Germany’s “leading digital education platform” with over 200,000 users, is on the cusp of being sold. GCA Altium, the M&A advisor, has collected final-round bids and will now select a suitor to enter a period of exclusivity within which to acquire the online tutoring provider. One source put SofaTutor’s annual revenues at around €20 million and added that GCA Altium is targeting an enterprise value of around €100 million. SofaTutor shareholders include Frog Capital, a venture-cap-meets-private-equity house based in London, which in 2018 led a €3 million investment round, as well as Acton Capital, IBB and JCMB. A sale of SofaTutor would mark further consolidation within Europe’s booming ed tech market, in which online learning providers Circus Street and Shaw Academy are currently being prepared for auction.
PLAY YOUR ACE: Eagle-eyed readers of this newsletter and EducationInvestor Global will be aware that final-round bids for ACE Education, the French university group owned by Oakley Capital and Inspired Education chief executive Nadim Nsouli’s family office, were due the week before last. Rumour Has It brings you an update on the auction that Rothschild & Co is handling. In the final round were French private equity houses Abenex Capital, Capital Croissance and Peninsula Capital. L Catterton, another French investment house backed by luxury goods group LVMH, dropped out earlier in the race. However, it is understood that NMN Cap and Oakley Capital’s firm price expectations of €200 million, equal to around 14-times ACE Education’s run-rate EBITDA, were not met by offers. Nevertheless, talks are ongoing – and a deal could still be reached. Late last week, a well-placed source said a deal was looking “more likely”. Cards are being kept close to the chest on this one, but we’ll keep you posted if/when we hear more.
MATCH POSTPONED: Remember UCFB, the football crazy, football mad private university in Manchester put on the block last September? Well, Rumour Has It can reveal that the auction, which was being steered by Signia Corporate Finance, has been called off. Sources speculated that the decision could be linked in some way to ALK Capital’s takeover of Burnley Football Club in December, which prompted the departure of Brendan Flood, UCFB’s chairman, chief executive and majority shareholder, from Burnley’s board. One banker speculated that UCFB’s shareholders, who reportedly have ties to Burnley’s former owners, could have received a windfall from the ALK transaction and subsequently decided to pump more money into UCFB. However, avid Rumour Has It readers will recall prospective investors’ concerns over the figures presented by Signia, which had seemingly sought to perform fancy footwork on UCFB’s financials. “Could the [ALK Capital narrative] be a cover-up story for being unable to get the terms they wanted?” one banker ponders.
ONE TO WATCH: Rumour Has It is increasingly hearing whispers around ISP. EducationInvestor Global in December revealed that ISP’s owner, Swiss private equity house Partners Group, had been approached by rival international school operator Cognita about a potential mega-merger. Advisors and bankers are divided on what will come next. Some have suggested that a competitive auction of ISP is imminent, while others say a merger with Cognita could still be on the cards. The final option under consideration is a sale of ISP by Partners Group to… Partners Group. This tactic, which has become fairly common amid the pandemic as a way for private equity firms to extend holding periods, would allow Partners Group to continue extracting profits from ISP for an indefinite period of time. Whatever happens, it sounds as if 2021 is going to be an interesting year for ISP, which has expanded since the coronavirus crisis began.
Josh O’Neill, editor, EducationInvestor Global
Date published: 9 February 2021