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(Bloomberg) — A consortium of state-backed entities in Abu Dhabi is weighing a stake in Dubai-based GEMS Education, one of the world’s largest operators of private schools, people familiar with the matter said.
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Wealth fund ADQ and real estate developer Aldar Properties PJSC are exploring a joint bid for a stake in private equity-backed GEMS, the people said, asking not to be identified as they discussed confidential information. Aldar, backed by Abu Dhabi wealth fund Mubadala Investment Co., already manages a school business called Aldar Education.
GEMS is owned by its founder Sunny Varkey and buyout firm CVC Capital Partners, who have been exploring options for their stake in the business. Any sale could value GEMS at around $6 billion, Bloomberg reported last month.
The deliberations are ongoing and there is no certainty that the Abu Dhabi fund will decide to bid for a stake in GEMS, the people said. Representatives for ADQ, CVC and GEMS declined to comment.
An Aldar spokesman said the company “continues to evaluate opportunities to expand its platform in core and complementary industries” in line with its growth strategy, declining to comment on specific deals.
Emirati parents are among the world’s biggest spenders when it comes to educating their children, leading to an oversupply of private schools. Dubai’s rise as a post-pandemic haven has drawn expats to the emirate, helping to boost demand.
GEMS dates back some 60 years and operates more than 60 schools in the Middle East and North Africa, serving more than 130,000 students. It also has schools in Asia, Europe and North America, according to its website. CVC acquired a stake in the company in 2019.
Varkey is in talks to sell some of his stake in GEMS in 2020, but has struggled to find a buyer during the pandemic, with schools and universities closed due to the global lockdown. The company also considered going public in 2019, but those plans were scuttled by Dubai’s unexpected move to freeze tuition fees.
The owner of GEMS is working with Morgan Stanley and Goldman Sachs to find a buyer, people familiar with the matter previously said. They also said that while the preferred option was a sale, they had also been considering an IPO as a potential exit route.
– With the assistance of Aaron Kirchfeld.
(Updated with Aldar’s response in fifth paragraph)
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