A consortium led by Brookfield Asset Management Ltd., through its Special Investments and Middle East private equity programs, has entered into a binding agreement to invest in GEMS Education in partnership with the Varkey Group. This consortium includes Gulf Islamic Investments, Marathon Asset Management, and the State Oil Fund of the Republic of Azerbaijan (SOFAZ). The transaction, anticipated to close in the third quarter of 2024, is subject to certain conditions.
While financial details were not disclosed, reports indicate that Brookfield was aiming to invest around $2 billion, potentially making this one of the largest private equity deals in the Gulf. As part of the transaction, existing minority shareholders, such as Khazanah Nasional Berhad and funds managed by CVC Capital Partners, are expected to significantly divest from their stakes.
Founded in 1959 by Indian immigrants who began with a single school in Dubai, GEMS Education has grown into one of the world’s largest private K-12 education providers, educating 140,000 students. The company offers various international school curricula at multiple price points and provides additional services such as school transportation and after-school activities.
According to Sunny Varkey, Founder of GEMS, the company has seen substantial growth over its 65-year history, establishing itself as one of the world’s most respected education providers. Brookfield’s partnership with the Varkey family and the GEMS community highlights the business’s breadth, the quality of education provided, and the critical infrastructure delivered for the UAE.
According to Dino Varkey, Group Chief Executive Officer of GEMS Education, the primary goal of the organization is to offer a world-class education. GEMS Education’s current global impact is stronger than ever, owing to its outstanding team. He expressed confidence in the company’s future growth prospects, attributing it to a favourable operating environment that is driving record enrollments, supported by a robust UAE economy and expanding population. Partnering with Brookfield aligns with GEMS Education’s ambitions for the next phase of growth.
According to Jad Ellawn, Managing Partner and Regional Head of Brookfield in the Middle East, the decision to invest in GEMS represents a significant milestone for Brookfield’s private equity operations in the region. This investment underscores Brookfield’s dedication to investing in the Middle East’s dynamic growth landscape and the resilience of regional alliances.
According to Dev Santani, Managing Director of Brookfield Special Investments, the GEMS transaction offers a chance to leverage its extensive local footprint, operational know-how, and Brookfield’s global network through its Special Investments program.
In preparation for the transaction, GEMS secured financing commitments from a consortium of UAE banks to fund the repayment of its existing financing arrangements. This move marks the culmination of a two-year sale process that commenced in 2022, following an earlier attempt to sell part of the Varkey stake in 2020 and a plan for a London IPO. GEMS Education was advised by deNovo Partners and Goldman Sachs, while the Varkey Group was advised by Westgrove Partners.
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