Investcorp nets 3x on GL Education

The Middle Eastern wealth manager has sold the educational assessments business to Levine Leichtman in a £210m deal, its seventh European exit in the last 12 months.

Bahrain-listed Investcorp has agreed to offload educational assessments provider GL Education to US-headquartered mid-market firm Levine Leichtman Capital Partners, according to a statement from the firm.

Financial details of the transaction were not disclosed, but it is understood that Investcorp sold the business for around £210 million (€262 million; $293 million), generating a 3x return. The sale is the seventh exit in Europe in the last 12 months for Investcorp, which invests primarily off its balance sheet.

Other recent exits include the €1 billion sale of Danish roofing material manufacturer Icopal to North American roofing manufacturer GAF, the listing of Asiakastieto on Nasdaq Helsinki, and the listing of Sophos Group on the London Stock Exchange.

Investcorp acquired GL Education in 2012. The company’s suite of assessments is used to measure children’s learning ability, track their progress and diagnose underlying factors affecting learning, the firm said.

Under Investcorp’s ownership the company has moved from a mainly paper-based product business to a digital, bundled solutions business model. As well as growing organically, GL Education has made several strategic add-ons, including acquiring the international rights to the Cognitive Abilities Test in 2013, which allowed it to expand its assessment series into a global offering.

In 2014 the company acquired The Test Factory to boost its digital capabilities, and in 2015 it acquired Lucid Research to expand its offering in the area of special educational needs.

It is understood that GL Education’s EBITDA has doubled under Investcorp’s ownership, with a projected EBITDA of more than £15 million in 2016.

Investcorp, which has recently undergone a leadership change, is aiming to more than double its assets under management to $25 billion in the next five to seven years. 

Mohammed Al Ardhi took on the role of executive chairman last July as part of the firm’s succession plan following Nemir Kirdar’s decision to retire as executive chairman and chief executive officer.

Mohammed Al-Shroogi, formerly president of Investcorp’s Gulf business, and Rishi Kapoor, formerly Investcorp’s chief financial officer, were appointed co-CEOs. Kirdar became chairman of the firm’s board of directors in April 2015.

In an exclusive interview with Private Equity International Al Ardhi said he is seeking growth across all business segments. The firm’s current $11 billion of AUM is split between $5 billion of hedge funds, $4 billion of private equity with the remainder in real estate.

Realisation proceeds and other distributions to Investcorp and its clients for the fiscal year ending 30 June 2015 exceeded $1.5 billion, taking total proceeds over the past three years to $5 billion. Net income for the period reached $116.7 million, up 13 percent on the 2014 fiscal year.