GP Investments, the publicly listed Sao Paolo private equity firm, has agreed to invest R$259 million ($155 million; €100 million) in Brazilian post-secondary education institution Estacio Participacoes.
The investment will be made through Moena Participacoes, a publicly held Brazilian company indirectly controlled by GP Investments’ GP Capital Partners Fund IV, according to Estacio. Fund IV closed on $1.3 billion in October 2007.
Estacio’s founders have agreed to sell GP a 20 percent stake in the institution held by the founding individuals. Following the sale, GP and the founders will share control of Estacio in regard to electing board members, hiring senior executives, executive compensation, budget approval and acquisitions.
The aim of the agreement is “to increase Estacio’s value through a strategic management of the business, focussing on the highly attractive Brazilian post-secondary education sector, which has witnessed double digit growth rates in recent years, anchored on a sizable market with low penetration rates and favorable macro economic conditions”, Estacio said in a statement.
Estacio has been listed on the Brazilian stock exchange since July 2007 and will rise to the highest level of Bovespa’s corporate governance, novo mercado, as part of the transaction. Novo mercado is a listing segment for companies voluntarily abiding by corporate governance and transparency requirements in addition to those required by law.
The post-secondary institution has 198,000 students making it the largest in Brazil. Its network includes one university, two university centers and 15 colleges.
The Latin American education sector has received interest from private equity investors including the Carlyle Group, which acquired Mexican university Universidad Latino Americana and also acquired Chilean university Universidad de Artes, Ciencias, y Comunicación via the firm’s $1 billion joint venture with US education provider Apollo Group.