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Brookfield to invest in Dubai’s Gems Education

Gems operates more than 60 schools with over 130,000 students across the Middle East and North Africa Roman Lacheev/Alamy via Reuters
Gems operates more than 60 schools with over 130,000 students across the Middle East and North Africa
  • School group to get huge injection
  • One of Gulf’s largest private equity deals
  • CVC to exit its stake

A consortium led by Canada’s Brookfield Asset Management is to invest in Gems Education, the UAE’s private school operator.

Other members of the group include Gulf Islamic Investments, Marathon Asset Management and the State Oil Fund of the Republic of Azerbaijan.

Financial details were not disclosed but the investment is expected to be almost $2 billion, making it one of the largest private equity deals in the Gulf.

The move will allow private equity firm CVC Capital Partners to exit the Gems stake it acquired in 2019.

The deal is expected to close in the third quarter, according to a press statement issued on Tuesday.

Existing minority shareholders including Khazanah Nasional Berhad will exit as part of the transaction. Funds managed by CVC Capital Partners will also exit their stake in the company, Bloomberg reported.

Gems operates more than 60 schools with over 130,000 students across the Middle East and North Africa. It also has schools in Asia, Europe and North America.

AGBI reported last month that Dubai’s private school market, once a goldmine for investors, is no longer yielding the lucrative double-digit returns it used to.

Navin Valrani, CEO of The Arcadia School, said new investors considering the emirate must tackle significant entry barriers, escalating costs and an increasingly mature market.

He warned that the emirate is crowded with more than 200 private schools from large and global operators, making the market less penetrable than it appears.

“Dubai is the world’s most competitive city for private independent schools,” he said.

However, Ashwin Assomull, partner and founding member of the global education practice at LEK Consulting, which is based in Dubai, said the UAE is an attractive market for M&A and greenfield development, driven by a clear regulatory framework and growing demand for high quality international K-12 education.

Jad Ellawn, managing partner at Brookfield, said the investment in Gems marks a milestone for the company "and our private equity business in the Middle East, underscoring our commitment to investing in this high growth region and the strength of our local partnerships”.

According to analyst IndustryArc, the Mena education sector is forecast to be worth $175 billion by 2027, with a compound annual growth rate of 8.5 percent from 2022.

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