Baring Asia-backed Nord Anglia raises $304m, jumps on debut
Nord Anglia Education, a school operator controlled by Baring Private Equity Asia, saw its shares close up 12.5% on the first day of trading on the New York Stock Exchange. This followed an IPO that raised $304 million.
Nord Anglia's peaked at $18.69 before closing at $18 on Wednesday. The company sold 19 million shares in the public offering, pricing them at $16 apiece, the midpoint of the indicative range. Baring Asia did not exit a portion of its holding but the PE firm's stake has been diluted to 74.6% from 93.3%.
Baring Asia has already taken money out of Nord Anglia via the high-yield market. The company raised debt financing on three occasions in 2012 and 2013. The first of these - which raised $325 million in March 2012 - was the first time a financial sponsor in Asia has issued a high-yield bond for dividend recap purposes.
Acting through Baring Asia Private Equity Fund III and Fund IV, it bought UK-listed Nord Anglia through a $379 million take-private transaction. 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.
Through a combination of organic expansion and bolt-on acquisitions - the most recent of which was WCL Group, bought for $222 million in May 2013 to strengthen Nord Anglia's presence in North America and the Middle East - the company now operates 27 schools, teaching children from kindergarten through the end of secondary school, or K-12 level.
As of February 2014, Nord Anglia had over 17,000 students and average revenue per student of approximately $26,600 for the 2013 financial year. Parthenon estimates that the 9,000 K-12 premium schools - defined as those charging at least $10,000 per year in fees - teaching primarily English globally generated revenues of around $58 billion in the 2012-2013 academic year.
Nord Anglia reported a pro forma loss of $16 million for the year ended August 2013, compared to an actual loss of $37.4 million the previous year. Pro forma revenue came to $323.7 million, up from $274.2 million in 2012, while adjusted EBITDA climbed from $70.2 million in 2012 to $103.4 million last year.
Schools in China and Europe accounted for the bulk of revenue, generating 36% and 33.4%, respectively.
The proceeds from the IPO will be used to pay down debt, partially redeem preference shares held by Baring Asia, as well as for general corporate purposes.
Credit Suisse, Goldman Sachs and J.P. Morgan were lead underwriters for the offering.
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