Baring Asia-owned Nord Anglia completes WCL bolt-on

The selling parties, Sovereign Capital Partners and WCL management, will receive approximately $237 million, implying an enterprise value of $222 million. Sovereign acquired a controlling interest in WCL in 2008.

WCL operates six schools in the US, one in Spain and four in Qatar, delivering K-12 education to approximately 4,500 students. The company also sells educational products and services to third-party customers, with its international curricula used by nearly 1,500 schools in 80 countries.

Baring Asia Private Equity Fund IV bought UK-listed Nord Anglia through a $379 million take-private transaction in 2008. At the time, the majority of the company's business was in Asia, with a high concentration in China. It has since more than tripled in size, entering other markets in Asia and Europe as well as creating a foothold in the Middle East.

The schools offer a British-style education, with most following a curriculum based on the UK model but adapted to suit local cultures and conditions.

Speaking to AVCJ last month, Jean Eric Salata, Baring's CEO, highlighted the attractive characteristics of education: it tends to be pre-paid, negative working capital where the customer pays up front for the year; it is a business that is relatively sticky in terms of recurring revenue - once people enroll they usually don't leave until graduation; it's difficult to penetrate - reputation, curriculums and quality credentials are essential to operating in the top tier.

"Many of the schools we come across aren't necessarily being run to their full potential from a financial or educational point of view," Salata said. "They are owned by families or institutions or some sort of original founder and have never been professionally run. Nord Anglia brings benefits that come from a more scale business, such as central resources. You can't do that if you have a stand-alone school."

Nord Anglia has also issued two high-yield bonds. The first, which took place in 2012 and raised $350 million, was the first-ever high-yield bond issued by a financial sponsor in Asia that was used for dividend recap purposes.

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