Private Equity Titans Compete in £12bn Auction for Major Global School Group

Three private equity firms are competing in the final stages of an auction for school operator Nord Anglia, which is set to be one of the largest European deals of the year.

Bain Capital, Permira, and Veritas Capital are among those through to the last round of the sale process, Financial Times reported, quoting sources familiar with the matter.

Final bids for a majority stake in the London-based group are expected later this month, with the business potentially valued at up to £12bn. Other bidders may still emerge, one source noted.

Nord Anglia’s current owners -- Swedish private equity group EQT and the Canada Pension Plan Investment Board -- are expected to retain a stake in any agreement. The Singaporean sovereign wealth fund GIC is also likely to co-invest alongside a successful bidder, the sources added.

The deal is among the largest potential transactions in Europe this year, alongside Abu Dhabi’s National Oil Company’s potential €14.4bn deal for German chemical group Covestro, and would-be buyers face complications due to the deal’s multibillion-pound size.

Larger private equity takeovers have encountered challenges recently as higher interest rates increase the cost of financing.
Another factor is how the new potential owner might realise a return from the deal, given the business is now so large it would likely need to return to the public markets via an initial public offering, one source said.

Although the European market for new listings has had its strongest start to the year since the Covid-19 pandemic, it remains volatile.

EQT and CPPIB might still consider an IPO for Nord Anglia as a contingency plan if a sale does not proceed, the sources added.
Nord Anglia operates 87 international day and boarding schools across 33 countries, including China, India, the Middle East and the Americas. Over the past two years, the company has added 10 schools mainly through acquisitions.

Some of its schools include Oxford International College in the UK and the exclusive Avenues in New York. In the UK, where Nord Anglia has a limited number of schools, the incoming Labour government has previously proposed removing tax benefits for private schools and imposing business rates on them.

More than 85,000 students up to the age of 18 are enrolled in its schools, alongside 11,000 teachers and thousands more support staff.

EQT’s Baring Private Equity Asia and CPPIB acquired Nord Anglia in 2017, delisting the company from the New York Stock Exchange for £3.4bn, including debt.

Private equity firms face a dual challenge: they are under pressure from their investors to divest assets to return cash, while also needing to make investments from their new buyout funds in a slower market. Education has been a popular sector for investment in private markets.

A consortium led by the Canadian investment group Brookfield agreed last month to invest in the Dubai-based education company GEMS.

Meanwhile, French investor Wendel earlier this month acquired a 50 per cent stake in the European primary and secondary school group Globeducate for €625mn, buying part of current shareholder Providence Equity Partners’ interest.

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