deNovo Partners advised GEMS Education

A consortium led by Canadian asset manager Brookfield entered into a binding agreement to purchase a majority stake in Dubai-based private school provider GEMS Education from a consortium led by buyout firm CVC Capital Partners for an undisclosed sum, according to a CVC statement. Dubai-based Gulf Islamic Investments (GII), Marathon Asset Management, and Azerbaijan’s State Oil Fund are all joining Brookfield in investing in GEMS Education.

The transaction could be valued at some USD 2 bn and is expected to target expanding GEMS’ portfolio by undertaking new acquisitions. If closed for USD 2 bn, the stake acquisition would mark one of “the largest private equity transactions in a closely held business in the Gulf,” Bloomberg previously reported.

The details: A group of Emirati lenders is helping finance the transaction by funding the repayment of the company’s existing obligations. CVC, which acquired 30% of GEMS for USD 1 bn in 2019, will retain a stake in the company, while existing minority shareholders, including Malaysia’s sovereign wealth fund Khazanah Nasional Berhad, will completely exit the education firm.

Timeline: The transaction is expected to be completed in 3Q 2024, subject to certain conditions being met by the Brookfield consortium by late June 2024.

Brookfield’s acquisition draws the curtain on GEMS’ hunt for partners: Brookfield’s investment follows two years of GEMS Education mulling going public and inviting investors to bid for CVC’s stake, with talks with wealth fund ADQ and state-backed real estate developer Aldar to buy a stake valued at USD 6 bn falling through last year.

deNovo Partners and Goldman Sachs acted as financial advisors to GEMS on the stake sale.