CPPIB, Baring Asia to acquire Nord Anglia in $4.3bn deal

The investment marks CPPIB’s first direct deal in private education.

The Canada Pension Plan Investment Board and pan-Asian private equity manager Baring Private Equity Asia have teamed up to acquire Nord Anglia Education, a Hong Kong-based operator of international schools, in a $4.3 billion deal.

The pair have made a cash offer of $32.50 per share for all outstanding shares they don’t already own, representing a premium of 18 percent to the New York-listed education company’s 24 April closing price, according to a statement.

“This investment in Nord Anglia is an excellent fit with our strategy to build a diversified portfolio capable of delivering strong, sustainable returns to the Canada Pension Plan Fund over the long term,” Deborah Orida, managing director, head of private equity Asia, CPPIB, said in statement. “The company, backed by a strong management team, is well positioned to benefit from the rising demand for high quality education in the kindergarten to grade 12 category globally, has demonstrated strong financial performance, delivers stable cash flows, and provides a platform for future growth in this sector.”

Nord Anglia has been majority-owned by Baring Asia since August 2008 through a $379 million take-private transaction using capital from 2005-vintage, $490 million Baring Asia Private Equity Fund III and 2008-vintage, $1.5 billion Fund IV. The firm currently owns 67 percent of Nord Anglia.

In February 2014, the firm raised more than $300 million through a US IPO, the proceeds of which were used to pay down debt and partially redeem preference shares held by Baring Asia.

Under the firm’s ownership, Nord Anglia expanded into the US and the Middle East with a $237 million purchase of US education company WCL Group in May 2013.

The agreement provides for a so-called go-shop period, in which a special committee of independent directors will solicit and potentially enter into discussions with third parties that offer alternative proposals over a 30-day period.

Nord Anglia was founded in 1972 and owns and operates 43 international schools in China, Europe, the Middle East, North America and South-East Asia. The company counts over 37,000 students from kindergarten through secondary education under its education network. It has also made collaborations with leading post-secondary institutions, including The Juilliard School, the Massachusetts Institute of Technology and Kings College London.

Baring Asia, which manages over $10 billion of assets across private equity, real estate and credit, is currently deploying its 2015-vintage, $3.98 billion Fund VI.

 

Photo from Nord Anglia Education