CVC exits China education business EIC
CVC Capital Partners has sold its stake in Education International Corporation (EIC), a China-based business that helps students enroll in universities overseas, to a consortium that includes the company founder.
The sale generated RMB4.5 billion ($692 million) for the private equity firm, according to a source familiar with the situation. CVC invested in EIC in 2013, reportedly paying around $200 million for a majority stake comprising shares held by minority investor Actis Capital and Joe Li, the company's founder and chairman.
The buyer consortium is led by NLD Investment, described as a China-based private equity fund with more than RMB10 billion in assets under management. Li and other members of the management team are working in partnership with NLD, according to a release. CVC was previously reported to be looking at a Hong Kong listing for EIC.
Li established EIC in Guangzhou in 2000 and it has since become China's largest provider of overseas educational counselling services, with a 13% market share. The company has placed more than 120,000 students in overseas education institutions, with 18,500 enrollments in 2014 alone. It also provides test preparation services. EIC has 26 counselling centers and 30 test preparation centers in China, as well as offices in the US, Canada, Australia and Hong Kong.
Following CVC's investment, Isa Wong, formerly of Pearson, was brought in as CEO, with Li continuing his involvement. In addition, EIC acquired New Pathway, a US-focused test preparation and college counselling specialist. This gave EIC a greater foothold in the US and a ready-made online and mobile platform.
No specific details were given as to the amount of growth in the business during the investment period, although Li acknowledged the industry knowledge, market expertise and resources contributed by CVC. EIC's website currently identifies Li as chairman, founder and CEO.
"We have been deeply impressed by EIC's world class management team and their success in expanding the business into new premium market segments, significantly upgrading products and service offerings, and generating outstanding business growth over the last few years. EIC is now well positioned to capture future opportunities in the rapidly expanding overseas education industry," said Hans Wang, a partner at CVC.
The investment was made from CVC's third pan-Asian fund, which closed at $4.1 billion in 2008. The firm is now investing its $3.5 billion fourth fund.
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