Dubai, United Arab Emirates: A consortium of investors led by Fajr Capital, including Tactical Opportunities funds managed by Blackstone (“Blackstone”) and Bahrain Mumtalakat Holding Company B.S.C. (“Mumtalakat”), the sovereign wealth fund of the Kingdom of Bahrain, have today announced the completion of their divestment from GEMS Education to a consortium led by CVC Capital Partners.
In July 2019, funds advised by CVC Capital Partners signed a definitive agreement to acquire approximately a 30% stake in GEMS Education, one of the world’s oldest and largest providers of private K-12 education. The transaction was subject to customary closing conditions, all of which have been satisfied.
GEMS Education, a UAE-born brand founded sixty years ago, educates over 120,000 students across 48 schools in the Middle East. Fajr Capital, Blackstone and Mumtalakat invested in GEMS Education in 2014 and subsequently partnered with the Varkey Group to build the company into a world-class institution and support its long-term growth. Since then, GEMS Education has delivered strong financial and academic results, invested over US$1 billion to build sixteen new schools and upgrade existing infrastructure, and grown in its existing markets, namely the UAE, as well as entering into new markets such as the Kingdom of Saudi Arabia. This growth was achieved through a combination of both inorganic and organic initiatives as well as through a diversification in education and service offerings.
Dino Varkey, CEO, GEMS Education, said: “The completion of the Fajr Capital, Blackstone and Mumtalakat investor group’s exit from GEMS Education to a consortium led by CVC Capital Partners marks another chapter in the evolution of our company. We thank each of these investors for their contributions over the past five years.
“Sixty years on from opening our first school, we believe more than ever now that ‘whatever the question, education is the answer.’ We are committed to this mission, and our belief in our potential to continue to enhance quality education in our growing school portfolio. This is aligned with our vision of expanding the business into new markets and continuing our long history of growth.”
Iqbal Khan, CEO of Fajr Capital, added: “We have greatly valued our partnership with GEMS Education and are very pleased with the outcome of this investment which has enabled us to deliver strong returns to our shareholders and consortium partners. Today’s announcement marks Fajr Capital’s third successful recent divestment and builds on our strong track record of investing in high-quality businesses across the Middle East and Southeast Asia. I am grateful to Sunny, Dino, the Varkey family, and our consortium partners for their support and would like to wish everyone at GEMS Education continued success in the future.”
Andrea Valeri, Senior Managing Director at Blackstone, said: “We are proud to have partnered with Sunny, Dino and the Varkey family over the past five years to support the growth of GEMS Education. Together we have invested over US$1 billion to double the size of the business while maintaining a focus on academic excellence. The investment is a great example of a successful partnership with an entrepreneur and his family where Blackstone was able to provide meaningful capital to enable accelerated and sustainable growth. Sunny, the Varkey family and GEMS Education all have our best wishes for their future endeavours.”
Mahmood H. Alkooheji, CEO of Mumtalakat, explained: “Over the last five years, GEMS Education has invested over US$1 billion in expansions and enhancements, in addition to investing in a wide portfolio of fourteen schools in KSA and four schools in Egypt through joint ventures, providing more young people with quality education than ever before. Our investment in GEMS Education was a reflection of our outlook on the education sector and our interest in strong companies with forward-thinking management teams.”
Fajr Capital, Blackstone, and Mumtalakat were advised by Rothschild & Co, Morgan Stanley, Credit Suisse and Gibson, Dunn & Crutcher LLP.
About GEMS Education
GEMS Education is one of the world’s oldest and largest K-12 private education providers. It is a highly regarded choice for quality private education in the Middle East and North Africa region. As a company founded in the UAE in 1959, it holds an unparalleled track-record of providing diverse curricula and educational choices to all socio-economic means. GEMS Education educates approximately 153,000 students globally across 81 schools; and through its growing network of schools as well as charitable contributions is fulfilling the founder’s vision of putting a quality education within the reach of every child.
About Fajr Capital
Fajr Capital is a private equity firm which invests in the Middle East and Southeast Asia. The company is owned by prominent sovereign investors from Abu Dhabi, Brunei Darussalam and Malaysia, and private investors from the Gulf region and beyond. To date, Fajr Capital has invested in several high-growth, demographic-driven sectors such as financial services, food and beverage, education, renewable energy, infrastructure, waste management, and industrial manufacturing, amongst others. Together with its portfolio companies, Fajr Capital employs over 15,000 people across over of its ten constituent markets, including Brunei Darussalam, Egypt, India, Indonesia, Malaysia, Oman, Singapore, Saudi Arabia, and the United Arab Emirates. Further information is available at www.fajrcapital.com or follow us on Twitter at @FajrCapital.
About Blackstone
Blackstone is one of the world’s leading investment firms. We seek to create positive economic impact and long-term value for our investors, the companies we invest in, and the communities in which we work. We do this by using extraordinary people and flexible capital to help companies solve problems. Our asset management businesses, with $545 billion in assets under management, include investment vehicles focused on private equity, real estate, public debt and equity, non-investment grade credit, real assets and secondary funds, all on a global basis. Further information is available at www.blackstone.com. Follow Blackstone on Twitter @Blackstone.
Tactical Opportunities (Tac Opps) is Blackstone's opportunistic investment platform. The Tac Opps team invests globally across asset classes, industries and geographies, seeking to identify and execute on attractive, differentiated investment opportunities. As part of the strategy, the team leverages the intellectual capital across Blackstone’s various businesses while continuously optimizing its approach in the face of ever-changing market conditions.
About Mumtalakat
Mumtalakat, the Bahrain Mumtalakat Holding Company, is the sovereign wealth fund of the Kingdom of Bahrain. With a mandate to grow the wealth of Bahrain through long-term investments based on sound financial, strategic and governance principles, Mumtalakat holds stakes in over 60 commercial enterprises with a portfolio spanning a variety of sectors, including industrial manufacturing, financial services, telecommunications, real estate, logistics, consumer products, healthcare and education. Further details on Mumtalakat can be found at www.mumtalakat.bh
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