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Saturday, October 12, 2013
Sunny Varkey to sell 33% GEMS stake for $500m
[Editor: Dubai-based investor Varkey Group (Gems Education) is the promoter of Everonn Education Ltd, a BSE listed company. CLICK HERE and CLICK HERE]
GEMS Education boss Sunny Varkey is selling up to 33 percent of the company in a bid to raise $500m, Arabian Business can exclusively reveal.
The Dubai-based education giant – believed to be the world’s largest private school provider – has appointed Credit Suisse to find investors to take equity in the company.
In a document prepared by Credit Suisse, GEMS is valued at between $1.5b to $2bn, with a total of $500m being sought in return for equity.
It is understood that a large chunk of any funds raised would be used to pay off the company’s existing loans with the Abraaj Group.
Varkey later said: "We are a company that is growing. We are looking to raise approximately $500 million in the near term.
"We will not sell more than 20 percent," Varkey told Reuters. He said GEMS had appointed Credit Suisse as a financial adviser to help with the sale process and seek investors.
In 2007, Abraaj took a 25 percent stake in the group, though five years later it was converted into loans.
New funds will also be used as extra working capital to fund expansion, and a proportion will be released back to the Varkey family which owns the company.
GEMS currently operates close to 100 schools in 19 countries, serving 147,000 students from 151 countries.
It employs 11,000 staff, and is planning to increase its presence to 50 countries within the next three years.
The company charges up to $40,000 a year in school fees.
Credit Suisse Investment Partner and Director Desh Sharma told Arabian Business he “did not know anything” about the deal.
Dino Varkey, Group Chief Operating Officer at GEMS Education, did not respond to enquiries at the time of publication.