The deal for the largest owner and operator of private schools in the kingdom could be worth about $400 million.
Tuesday 19, March 2019
(Bloomberg) --GEMS Education, the Dubai-based school operator backed by Blackstone Group, is in advanced talks to invest in Saudi Arabia’s Maarif for Education & Training chain of schools.
Samba Capital is advising the owners who are seeking to sell all or part of the company, the people said. A final decision hasn’t been made and the company’s plans could change.
Maarif, owned by the Al Blehed family, runs more than 100 schools across the Kingdom, offering Arabic and internationally recognised curriculums, according to its website.
Under Vision 2030, Saudi Arabia is encouraging private-sector participation in education, as it seeks to wean the economy off oil.
According to PwC Middle East, Saudi Arabian schools will require over one million additional seats in Grades 1-12 by 2020, of which 150,000 should come from around 800 new private schools.
However, private schools are currently facing shrinking enrolments from expatriates who are leaving the Kingdom in droves.
GEMS has been acquiring other school operators in Africa and in the Middle East as it look to boost growth ahead of a possible stake sale to a private-equity firm or through an initial public offering (IPO).
Blackstone and other investors in GEMS are considering the sale of a 25 per cent stake in the school operator after the IPO was put on hold in October last year.
Mergers and acquisitions in the Middle East are picking up pace this year as regional owners and buyout companies look to exit investments and international operators as well as other private-equity businesses seek to expand into new markets.