Education

Mergers and acquisitions to fuel Saudi education growth

December 9, 2024, 7:53 AM

The number of children in education in Saudi Arabia is projected to reach 9.5 million by 2030

Maarif buys Ibn Khaldoun’s schools
Britus Education sold to Bahrain’s GFH
9m school children in Saudi Arabia

Mergers and acquisitions will play a vital role in the future of Saudi Arabia’s lucrative education sector, which could offer returns in the region of high double-digits, according to an industry expert.

There has been a flurry of M&A activity in education in recent weeks. Maarif, one of the largest education companies in the country, has bought Ibn Khaldoun. Ibn Khaldoun has 13,000 students across four schools and the deal will increase Maarif’s student total to more than 36,000.

Also in November, GFH Financial Group of Bahrain entered into an agreement with the Saudi Education Fund to buy Britus Education. Britus has four schools in Saudi Arabia, two in the UAE and one in Bahrain, and a market value of more than $200 million.

PwC Middle East has acquired Emkan Education, a Saudi specialist consultancy.

“Mergers and acquisitions will undoubtedly play a key role in consolidating the market,” said Chandra Tiwari, founder and chief financial officer of AlephYa Education.

“This is expected to benefit the sector by improving the quality of education, increasing capacity and strengthening schools.”

AlephYa Education owns and operates schools across the GCC, including four in Saudi Arabia, and plans to expand further, according to Tiwari.

It’s a lucrative market to explore, with one industry expert forecasting double digit returns for investors.

The appetite to invest is certainly there. Earlier this month Saudi-based edtech company Aanaab raised $7 million in a series A funding round from Dubai Investment Holding. The start-up, founded in 2019, provides digital training for over 200,000 K12 teachers and educators across 10 countries in the Middle East and North Africa.

Saudi Arabia has the highest school-age population (4-18 years) in the GCC. By the end of 2023, the number of school-going children in the country was 9.1 million.

This figure is projected to rise to 9.5 million by 2030, according to Talha Maqsood, head of education at Colliers Middle East, who also said 1,200 new private schools would be needed by 2030.

Yet private day schools account for just 15 percent of total student enrolment in the country.

“Based on the demand for new schools and quality, and the surge in new schools opening, the Saudi private school sector will eventually become the largest and most competitive in the region,” said Shaun Robison, CEO of BBD Education, a management company that specialises in international schools.

Education is a pillar of the country’s Vision 2030 programme to wean itself off a dependence on hydrocarbons – and demand is being fuelled by rising household incomes and an evolving regulatory environment, as well as the young population.

There was an 86 percent rise in investment licences issued by education authorities in the second quarter of this year, according to the Ministry of Investment.

This is expected to increase further, with 76 investment opportunities in education listed on the Invest Saudi platform as the government looks to advance private sector participation through public-private partnerships.

Amanat Holdings, a Dubai-listed investment company, appointed SNB Capital last week to manage the proposed sale of a 30 percent stake in its education business through an initial public offering in Saudi Arabia next year.

“Definitely it’s a market in the region that we are spending more and more time in,” said Tiwari. “We’re keen to grow further.”