Mumbai: Amsterdam-based Global University Systems (GUS) is in talks to buy the India business of US-based Laureate Education for at least Rs 1,200 crore, said two people familiar with the development. This will be one of the largest buyout deal in the private education space. Laureate, which owns businesses like Pearl Academy, has been in talks to sell its business for over last six months as the company has not been able to make enough money from the India business.
Several other bidders like the Jagran Group and Ranjan Pai-owned Manipal Education and Medical Group (MEMG) have also had discussions with Laureate for the acquisition, but talks with GUS have advanced. Consulting firm EY is advising Laureate on the deal.
“The transaction is being discussed at an EBITDA (earnings before interest, taxes, depreciation and amortisation) multiple of 7-8 times,” said one of the sources mentioned above, adding that the business had EBITDA of Rs 150-180 crore.
Email queries sent to GUS and Laureate spokespersons on Friday did not elicit a response till the time of going to press.
Laureate first explored India business in 2003 when it roped in former senior Tata executive Jacob Kurien to spearhead its entry. But it made a significant presence felt only in 2011 when it first acquired a majority stake in Pearl Academy of Fashion, Design and Media. It increased its stake in Pearl Academy from 55% to 90% for $11.4 million in October 2017.
In April 2013, Laureate acquired 95% stake in M-Power Energy India, which runs University of Technology & Management (UTM) and the University of Petroleum and Energy Studies (UPES), for about $54 million.
Laureate was taken private by buyout major KKR in 2007 in a $3.8-billion deal and went public again on Nasdaq in 2017. At the time of the company’s IPO, it had over 95% of its 1 million students in the international market. But over the last few months, the company has been streamlining its assets, selling business across markets like in Asia, Europe and Central America which is expected to generate $1 billion.
If the deal goes through it will help GUS, which has a big presence in Europe besides Canada and Singapore, a major presence in India. The company had set up an office in Hyderabad last year.
News credit : Indiatimes