Bain Capital, Permira and Veritas Capital among contenders in final round of Nord Anglia auction
Three private equity groups are battling it out in the final stages of an auction process for school operator Nord Anglia, in what is likely to be one of the largest European deals of the year.
Bain Capital, Permira and Veritas Capital are among the contenders through to the last round of the sale process, according to people familiar with the matter.
Final bids for a majority stake in the London-based group are due later this month and the business could be valued at up to $15bn, the people added. Other bidders could yet be involved, one of the people cautioned.
Nord Anglia’s existing owners — Swedish private equity group EQT and the Canada Pension Plan Investment Board — are likely to retain a stake in any deal, the people said. The Singapore wealth fund GIC is also likely to co-invest alongside a possible winning bidder, they added.
The deal is among the largest potential transactions in Europe this year, ranking alongside the likes of Abu Dhabi’s National Oil Company’s potential €14.4bn deal for German chemical group Covestro, and would-be acquirers face complications due to the deal’s multibillion-dollar size.
Larger private equity takeovers have faced challenges in recent years as higher interest rates make financing the deals more costly.
Another consideration is how the new potential owner could generate a return from the deal, given the business is now so large it would likely need to return to the public markets via an initial public offering, one of the people said.
While the European market for new listings has had its strongest start to the year since the Covid-19 pandemic, it still remains choppy.
EQT and CPPIB could still seek an IPO for Nord Anglia as a back-up plan if a sale does not materialise, the people added.
Nord Anglia has 87 international day and boarding schools in 33 countries, including in China, India, the Middle East and Americas. In the past two years alone the company has added 10 schools largely via acquisitions.
Some of its schools include the Oxford International College in the UK and the exclusive Avenues in New York.
In the UK, where Nord Anglia has a small number of schools, the new governing Labour party has previously said it would cut a tax perk for private schools and impose business rates on them.
More than 85,000 students up to the age of 18 are in its schools alongside 11,000 teachers and thousands more support staff.
EQT’s Baring Private Equity Asia and CPPIB acquired Nord Anglia in 2017, delisting the company from the New York Stock Exchange for $4.3bn including debt.
Private equity groups face a double-sided challenge. They are under pressure from their backers to sell off assets in order to return cash, and must also make investments from their new buyout funds in a slower market.
Education has proved a popular sector for investment in the private markets.
A consortium led by the Canadian investment group Brookfield agreed a deal last month to invest in the Dubai-based education company GEMS.
Meanwhile, the French investor Wendel earlier this month took a 50 per cent stake in the European primary and secondary school group Globeducate for €625mn, acquiring part of current shareholder Providence Equity Partners’ interest.
Veritas did not respond to requests for comment. Bain, Permira, GIC, EQT, CPPIB and Nord Anglia declined to comment.
