Carlyle in $145m Chinese education exit

The Carlyle Group has sold Wall Street English, the Chinese subsidiary of English language school Wall Street Institute, to Pearson for $145 million in cash.

The 37-year-old adult language school was purchased for an undisclosed amount in February 2005 by Carlyle Venture Capital II, a $600 million growth capital fund. Citi Private Equity co-invested in the deal.

The company operates more than 400 centres in 28 countries, and at the time of Carlyle’s 2005 purchase, managing director Brooke Colburn had said the demand for instruction was growing exponentially in Asia.

Since Carlyle’s initial investment in Wall Street Institute, “the company has grown revenue three-fold”, Colburn said in a statement today. “Over the same period, the business has expanded dramatically in China, opening more than 25 new facilities in seven Chinese cities.”

Wall Street Institute: growing revenue

Wall Street English was launched in 2000 and teaches around 35,000 students across 39 centres in cities including Beijing, Shanghai, Guangzhou and Shenzhen. Carlyle said between 2006 and 2008 the Chinese unit achieved compound annual revenue growth of more than 40 percent, with sales expected to hit $70 million this year.

The buyout firm has a robust private education portfolio, including numerous Asian companies. Last year, it invested $50 million in HaoYue Education Group, a Chinese private higher education provider. In 2007, its third Asian growth fund invested $20 million in NeWorld Education Group, a language institute that specialises in teaching Chinese people Japanese, as well as $20 million in Topia Academy, an after-school education provider in Korea.

Carlyle has nearly $86 billion under management. Last year, it was ranked as the world’s largest private equity firm by the PEI 50, a proprietary list compiled by PEI Media. An expanded version, the PEI 300, will be published on PEO next week.