A consortium of investors led by Kohlberg Kravis Roberts is buying Laureate Education, a listed university group, for $3.8 billion (€2.9 billion).
The group will pay $60.50 per share in cash for Laureate, which operates 24 private universities in 15 countries and also has a growing online business. The company, which employs about 25,000 people worldwide, had revenues of about $799 million for the first nine months of 2006.
It is fourth time lucky for the KKR-led group, which first approached the board about a potential buyout in September 2006. A committee of independent directors voted unanimously to accept the $60.50 proposal on January 5, but only after rejecting three previous bids.
However, the deal does include a ‘go-shop’ provision, which gives the board 45 days to actively solicit a higher offer.
KKR is backing Douglas Becker, the chairman and chief executive of Laureate, and has teamed up with a large consortium of hedge funds and investor groups, including Citigroup’s private equity arm, SAC Capital Management, Sterling Capital, SPG Partners, Makena Capital, Torreal, Southern Cross Capital, Bregal Investments and the Caisse de depot et placement du Quebec.
It is not the first example of private equity interest in the education sector. Last year Providence Equity Partners and Goldman Sachs joined forces to buy US schools operator Education Management for $3.4 billion in cash, while Educate, another US education company, is also mulling a management buyout proposal.
Citigroup and Goldman Sachs advised and provided debt finance to the investor group, while Morgan Stanley and Merrill Lynch advised the committee of independent directors.