China's Primavera supports buyout of US study abroad business

Eurazeo will take a majority stake in the company for around $500 million, while Primavera is committing an undisclosed sum for a minority interest. The transaction is expected to close by the end of the year.

Through partnerships with more than 7,000 K-12 schools and 800 universities in 100 countries, every year WorldStrides sends more than 400,000 students overseas on academic, professional, performing arts and sports programs. The company claims to have worked with over 7 million students since its inception in 1967. It generated in excess of $580 million in revenue for the year ended June 2017.

WorldStrides is currently owned by Metalmark Capital and Silverhawk Capital Partners, which bought the business from The Carlyle Group in 2016. Carlyle acquired WorldStrides five years earlier from Charlesbank Capital Partners and Silverhawk, with both investors retaining minority stakes. CEO Jim Hall said Primavera and Eurazeo would open up more global travel opportunities for students.

"We see a strong secular trend driving demand for global student travel into and out of the Greater China region,” said Fred Hu, founder of Primavera, in a statement. “We look forward to working closely with Eurazeo and Jim Hall and the management team to accelerate the company’s expansion into international markets.”

Primavera is currently investing its second US dollar-denominated fund, which closed last year at $1.93 billion. While the GP primarily targets China-based companies, it also participates in cross-border deals that have a China angle. For example, last year Primavera partnered with Shanghai Pharmaceuticals in the A$313 million ($238 million) acquisition of Australian nutrition and healthcare products company Vitaco.

Eurazeo has approximately $8 billion in assets, of which $1 billion is managed on behalf of third parties. Its strategies range from large and mid-cap private equity to real estate to branded consumer and retail private equity. The firm has offices in Paris, Luxembourg, New York, Sao Paolo, and Shanghai. The Shanghai base opened in 2013.

The WorldStrides investment reflects increasing interest from PE in tapping China’s fast-growing private education industry, either through investments in schools or related services.

Earlier this year, Baring Private Equity Asia and Canada Pension Plan Investment Board (CPPIB) completed a $4.3 billion take-private of US-listed Nord Anglia Education – an existing Baring portfolio company – because they saw more long-term growth potential for the K-12 school operator. There have also been large late-stage rounds for the likes of VIPKid of Zuoyebang.

On the exit side, Bain Capital and Ascedent Capital Partners completed US listings of Rise Education and RYB Education, while Four Seasons Education and Ambow Education are both targeting the US main board.

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• Topics
• Greater China
• North America
• Buyouts
• Consumer
• China
• USA
• Education
• Primavera