Affinity buys Malaysia education business for $180m

Laureate will receive $162 million of the proceeds with the rest going to minority shareholders. The capital will come from Affinity’s fourth pan-Asian fund, which closed at $3.8 billion in early 2014. The GP is understood to be on course for a first and final close of Fund V above the $5 billion target before the end of this year.

Laureate’s Malaysia business, which is known as INTI University & Colleges, has been in operation since 1986 and comprises five campuses that cater to more than 16,500 students for the current academic year. Degree-level courses offered range from business to biotechnology, as well as programs run in conjunction with universities in the US, UK and Australia.

Malaysia represented Laureate’s first foray into the Asia, Middle East and Africa (AMEA) market with the acquisition of INTI Education Group in 2008. The AMEA footprint now includes 21 higher education institutions across Australia, China, India, Malaysia, New Zealand, Saudi Arabia, South Africa, and Thailand. It had 85,700 student enrolments as of December 2016.

The AMEA business generated $431.3 million in revenue last year, up from $422.1 million in 2015, while adjusted EBITDA rose from $49.9 million to $59.9 million. Laureate’s most recent annual report doesn’t offer financial performance data for Malaysia specifically. The company’s overall revenue reached $4.24 billion in 2016 with enrolments surpassing $1 billion.

“Affinity is committed to making the appropriate investments, financial and otherwise, to help INTI become the leading higher education institution in Malaysia. In due course, we hope to bring the INTI experience beyond Malaysia,” Benny Lim, a managing director at Affinity, said in a statement.

Laureate was taken private in 2007 by a consortium led by Douglas Becker, the company’s chairman and CEO, and including KKR, Citigroup Private Equity, SAC Capital Management, SPG Partners, Bregal Investments, Caisse de dépôt et placement du Québec (CDPQ), Makena Capital, and Sterling Capital. They paid $3.8 billion, including $1.7 billion in debt.

The company filed for an IPO in 2015 but it did not proceed. It ended up listing on NASDAQ in early 2017, raising $456.5 million. None of the private equity shareholders made partial exits and the consortium still holds a controlling interest. INTI represents Laureate’s third divestment of a country-level business to a private equity investor in the past 18 months.

Affinity completed its debut Malaysia investment in 2014 with the purchase of a significant minority interest in poultry producer Leong Hup International. It subsequently acquired Island Hospital, a hospital focused on medical tourism.

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• Topics
• Southeast Asia
• Buyouts
• Consumer
• Malaysia
• Education
• Affinity Equity Partners