Allen & Overy advises GEMS education

The firm is advising GEMS on the acquisition by a consortium led by CVC Capital Partners of a significant minority stake in GEMS MENASA Holdings Limited.

Allen & Overy is advising GEMS Education (GEMS) on the acquisition by a consortium led by CVC Capital Partners (CVC) of a significant minority stake in GEMS MENASA Holdings Limited.

Upon completion of the transaction, CVC will acquire approximately 30 per cent of the issued shares in GMHL from certain existing shareholders, including a consortium (Gamma) comprising Blackstone’s Tactical Opportunities Fund, Fajr Capital Limited and Bahrain Mumtalakat Holding Company B.S.C., the sovereign wealth fund of the Kingdom of Bahrain, which together acquired a significant minority stake in GMHL in 2014 (and on which Allen & Overy also advised GEMS).

Existing minority investor Khazanah Nasional Berhad, a sovereign wealth fund of Malaysia, which invested in GMHL in January 2018, will retain its 3 per cent stake in the company. The transaction is expected to complete in August 2019.

GEMS has grown from a single school started by a family of teachers in 1959 to become the world’s largest provider of private K-12 education by revenue. As at February 28, 2019, GEMS Education owned and operated 49 schools in the United Arab Emirates and Qatar. Since Gamma invested in 2014, GEMS has invested more than USD1 billion in enhancing and expanding its offering. GEMS recently invested in a portfolio of 14 schools in the Kingdom of Saudi Arabia and four schools in Egypt through joint ventures with Hassana (an investment company of the Public Investment Fund of Saudi Arabia) and EFG Hermes, respectively.

The Varkey Group, the founding shareholder of GEMS, will continue to operate schools independently under the GEMS brand and other brands in the United States, France, India, Singapore, Malaysia and Sub-Saharan Africa. The Varkey Family will remain the largest shareholders in GMHL once the transaction has completed.

Corporate partner David Foster, who led the A&O team, commented: “This transaction represents one of the largest (if not the largest) ever private equity deals in the MENA region outside of the Oil & Gas sector and is a vote of confidence by a significant global investor in both GEMS and the MENA region more generally. We are delighted to have advised our long-standing client GEMS Education on another strategic transaction.”