Baring Asia, CPPIB complete Nord Anglia acquisition
Baring Private Equity Asia and Canada Pension Plan Investment Board (CPPIB) have completed their $4.3 billion privatization of US-listed Nord Anglia Education, a school operator in which Baring Asia was already majority shareholder.
The company’s shares will be suspended prior to the start of trading on September 5, according to a filing.
Baring Asia is participating through its sixth fund, which will – in conjunction with CPPIB – take out positions held by its third and fourth funds. As such, the deal required approval from the LP advisory committees of each of the three vehicles involved. This is the second time Baring will privatize the company, having originally de-listed it in the UK in 2008.
The two investors are paying $32.50 apiece for all outstanding shares they don’t already own - an 18% premium to the April 24 closing price - and secure repayment of the company’s debt. Nord Anglia’s stock closed at $32.57 on September 1.
Baring Asia holds a 66.9% stake in the company. The GP owned 93.3% ahead of Nord Anglia’s IPO in March 2014, which saw 19 million new shares sold for $16 each, generating proceeds of $304 million. Its stake was diluted to 74.6% and the firm received $61.6 million alongside members of the management team through a partial redemption of preference shares.
Baring Asia had already taken money out of the business via recaps. Nord Anglia raised debt financing on three occasions in 2012 and 2013. The first of these – worth $325 million in March 2012 - was the first time a financial sponsor in Asia has issued a high-yield bond for dividend recap purposes.
Nord Anglia educates more than 37,000 K-12 students through a network of 43 schools in China, Europe, the Middle East, Southeast Asia and North America. When Baring Asia privatized the company in 2008 the majority of its business was in Asia, and China in particular. By 2014, through organic expansion and bolt-on acquisitions, Nord Anglia had tripled in size and achieved more of a geographical balance.
The company posted revenue of $856 million in 2016, up from $573.1 million a year earlier. Net profit rose from $7.7 million to $49.2 million over the same period.
Baring Asia and CPPIB see potential for further long-term growth driven by demand for high-quality private education and ongoing consolidation of a global premium K-12 market in which single-site operators hold a more than 85% share. Nord Anglia is expected to leverage its scale to attract top teaching talent and forge educational partnerships.
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