Fajr Capital, Mumtalakat and Blackstone acquire significant minority stake in GEMS Education

  • Investment will enable GEMS Education to extend its leadership position in the global educational sector

Dubai, United Arab Emirates | 15 October, 2014 – GEMS Education has today announced that an investor group led by Fajr Capital has acquired a significant minority stake in GEMS Education’s emerging markets business, covering the Middle East, North Africa and East Asia. Bahrain Mumtalakat Holding Company (“Mumtalakat”), the investment arm of the Kingdom of Bahrain, and Tactical Opportunities funds managed by Blackstone (“Blackstone”) are the other partners in the investment consortium.

GEMS Education, a UAE born brand founded 54 years ago, is now the world’s largest provider of K-12 private education – operating more than 50 schools, educating over 140,000 students and employing over 13,000 people across 19 markets in the Middle East, North America, Europe, Asia and Africa.

The investment in GEMS Education separates the global education business into two discrete entities – with the investor group investing in the high growth markets of the MENA and ASEAN regions. Private education in the emerging and developing world is characterized by increasing school age populations, high demand dynamics for quality education and fast-growing middle classes. GEMS Education is uniquely positioned to serve these markets given its advanced education delivery systems and its blended curricula offering, which can cater to parents’ ambition,  aspiration and the affordability of education for their children.

Fajr Capital, Mumtalakat and Blackstone will now work closely with GEMS Education’s existing shareholders to accelerate expansion plans in the company’s key growth markets, particularly Saudi Arabia, Qatar, Malaysia and the Kingdom of Bahrain. The new shareholders will also support continuing efforts to strengthen GEMS Education’s corporate governance as the business grows into new markets and territories. This includes the appointment of Sir Michael Peat as the new independent Chairman to the Board of Directors as well as the recent appointment of Saeed Al Muntafiq as the Group Chief Executive Officer. Sir Michael was previously a partner at KPMG, before working for HM Queen Elizabeth II and The Prince of Wales for 20 years.

Sunny Varkey, Founder, GEMS Education, said: “Our expansion in existing markets and to new markets requires a significant long term commitment in resources. The agreement with our new shareholders allows us to accelerate our expansion plans and secure first-mover advantage in markets with strong fundamentals and clear opportunities over both the medium and long term. It enables us to continue to develop and invest in our home market of the UAE and explore opportunities across neighbouring GCC markets, particularly the Kingdom of Saudi Arabia, Qatar and the Kingdom of Bahrain.

“We also recognise the benefit our education model can bring to the leading emerging economies of South East Asia such as Malaysia, Indonesia and the Philippines. The importance of the education sector should not be underestimated – it is a true catalyst for change in the world. This transaction allows GEMS to further its mission of attempting to put a quality education within the reach of every child.”

Iqbal Khan, Chief Executive Officer, Fajr Capital, added: “Today’s announcement marks Fajr Capital’s fifth strategic investment in 2014 and sends a strong message about our ability to focus on the most attractive investment opportunities in our core markets. GEMS Education understands the dynamics of the education sector and the opportunities presented by offering quality, independent education in markets where there is a clearly identified and often latent demand. We have the utmost respect for what Sunny Varkey and the Varkey family have achieved over the last 50 years and more.  We are working  closely with the Varkey family as well as our investment partners, Mumtalakat and Blackstone, and the high calibre management team in place at GEMS.”

Mahmood Hashim Al Kooheji, Chief Executive Officer, Mumtalakat, said: “The education sector is an industry which has solid growth potential and GEMS has proven to be a leader in this sector across the region. We are therefore delighted to be partnering with Fajr Capital and Blackstone on this opportunity. Mumtalakat is actively investing in such market leading companies across the globe. As an active shareholder, we seek to establish long-term partnerships with our portfolio companies with a focus on creating and enhancing sustainable growth.  We look forward to supporting the expansion of GEMS in its target markets and we are proud to be contributing to raising the standards of education throughout the MENA region and Asia, through this investment.” 

Andrea Valeri, Senior Managing Director of Blackstone Tactical Opportunities, said: “We are delighted to make this investment in GEMS and in the Middle East.  GEMS has developed in to the market leader in the education sector in the region, and we look forward to working with the other shareholders and the management team as the business expands its operations.”

Deloitte acted as sell-side advisors on the deal, with Allen and Overy providing legal representation to GEMS Education. Barclays, Freshfields Bruckhaus Deringer and KPMG acted on behalf of the investor consortium.

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About GEMS Education

GEMS Education is a pioneering education company. Through our schools, consulting practice and our charitable foundation we are advancing education for all. Every day in our schools around the world, we prepare thousands of children of all ages for real world success.

We are a catalyst and delivery partner.  GEMS Education Solutions works with governments, donor agencies and private clients to improve education systems, and provide vital training for young people in an increasingly competitive world.

Through the Varkey GEMS Foundation we campaign for, and support, initiatives that change lives through education.

About Sir Michael Peat

Sir Michael was a partner at KPMG, before working for HM Queen Elizabeth II and The Prince of Wales for 20 years. He is now a director of CQS investment management, an independent non-executive on the Board of Deloitte UK, senior independent non-executive director of Evraz Plc and a non-executive director of Tamar Energy. He was a fellow of Eton College for 10 years and is an honorary fellow of Trinity College Oxford.

About Fajr Capital

Fajr Capital is a leading sovereign-backed investment firm, with a diverse portfolio of promising and profitable companies operating across high-growth Organisation of Islamic Cooperation (OIC) markets. Headquartered in the Dubai International Financial Centre, Fajr Capital is backed by prominent GCC and ASEAN institutional investors, such as Abu Dhabi Investment Council, Government of Brunei Darussalam, Brunei Investment Agency, Khazanah Nasional, Mohammed Alsubeaei & Sons Investment Company (MASIC) and HSBC.

Fajr Capital’s focus is on strategic high-growth sectors, including: financial services, infrastructure, education, healthcare and energy. Fajr Capital’s Board of Directors, chaired by Adib AlZamil from the Zamil Group, comprises of senior global economic and business leaders. The firm’s management team is led by seasoned investment and financial services professionals, with a proven track record and unparalleled expertise. Further information is available at www.fajrcapital.com or via Twitter @FajrCapital.

About Mumtalakat

Mumtalakat is the investment company for the Kingdom of Bahrain and was established in June 2006 by Royal Decree as an independent holding company for the government of Bahrain’s strategic key commercial assets. Mumtalakat was created to align and implement the execution of the government’s initiatives to pursue value-enhancing opportunities, improve transparency and help achieve operational excellence for its state-owned assets.

Mumtalakat holds stakes in 38 commercial enterprises spanning a variety of sectors, including aluminium production, financial services, tourism, telecommunications, real estate, transportation, and food production. For further information: www.bmhc.bh or @Mumtalakat_BH

About Blackstone

Blackstone is one of the world’s leading investment firms. We seek to create positive economic impact and long-term value for our investors, the companies we invest in, and the communities in which we work. We do this by using extraordinary people and flexible capital to help companies solve problems. Our asset management businesses, with almost $300 billion in assets under management, include investment vehicles focused on private equity, real estate, public debt and equity, non-investment grade credit, real assets and secondary funds, all on a global basis. Blackstone also provides various financial advisory services, including financial and strategic advisory, restructuring and reorganization advisory and fund placement services. Further information is available at www.blackstone.com. Follow Blackstone on Twitter @Blackstone.

Blackstone’s Tactical Opportunities business employs an opportunistic, multi-asset class investment strategy focused on special situations investments.  Tactical Opportunities seeks to invest globally in opportunities throughout the capital structure.  The strategy leverages the deep synergies and experience that exist across Blackstone’s leading alternative asset and advisory platform to generate attractive opportunities.    

For further information please contact:

Margaret Flanagan
ASDA’A Burson-Marsteller for GEMS Education
Tel: +971 4 450 7637
Email: [email protected]   

Noman Tahir
Head of Communications, Fajr Capital
Direct: +971 56644 2530
Email: [email protected]  

Nada Abdulghani
Bahrain Mumtalakat Holding Company
Direct: +973 1756 1281
Email: [email protected]

Andrew Dowler
+44 (0) 20 7451 4275
Email: [email protected]