Providence pays CHAMP $555m for Study Group

After initially seeking an IPO exit, the Australian buyout firm has sold the education provider to Providence Equity Partners.

Providence Equity Partners has acquired Australia’s Study Group from CHAMP Private Equity and Petersen Investments in a secondary transaction worth A$660 million (€450 million; $554.6 million).

The sale of the company comes five months after Study Group appointed Deutsche Bank and Credit Suisse for a possible initial public offering (IPO) this year on the Australian Securities Exchange. While the company had stated then that an IPO was its preferred option, it did not rule out the possibility of a trade sale. According to Australian media reports at the time, the company was expected to raise up to $A600 million from a listing. 

Sydney-based CHAMP Private Equity bought Study Group in September 2006 from Daily Mail & General Trust, a UK media group, for A$176.4 million in partnership with Petersen Investments. 

Assuming CHAMP and Petersen Investments did not subsequently inject more capital into the company, the sale to Providence marks a 3.7x return on the investment for the two firms.

“Investment returns were driven by outstanding EBITDA growth, with significant investments in capital to upgrade existing facilities, expand campuses globally and develop new higher education products,” Darren Smorgon, a director at CHAMP Private Equity, said in a statement.

Arvid Petersen, head of Petersen Investments, previously ran Study Group Australia before selling the business to Daily Mail and General Trust in 2004. Petersen, executive chairman of Study Group, has now assumed the role of non-executive chairman and continues as a shareholder in the company, the firms said in a statement.

Established in 1994, Study Group provides higher education, language and career education in the US, UK, Australia and New Zealand. Today, the company has more than 55,000 students at 38 campuses in the four countries, in addition to 70 university and college partnerships in the US, 12 in the UK, and seven in Australia and New Zealand. 

Study Group is a natural fit alongside Providence Equity Partners’ other education investments such as Assessment Technologies Institute, Archipelago Learning, Edline, and Education Management Corporation, Peter O. Wilde, Providence managing director, said in a statement. 

Goldman Sachs was the financial advisor to Providence. Credit Suisse and Deutsche Bank were financial advisors to Study Group.

Separately, CHAMP also said today it has acquired ATF Services, a supplier of temporary fencing, from Sydney-based Quadrant Private Equity, for an undisclosed sum. 

CHAMP is currently in the market for CHAMP Funds III, which is targeting A$1.5 billion close later this year. As of April, the firm had raised closed to A$1 billion for its third buyout fund, two sources told PEI Asia at the time.