Omers buys into Partners Group's International Schools Partnership

The transaction gives ISP an enterprise value of €1.9bn, Partners Group said in a statement. According to a source close to the situation, this equates to almost 20x its EBITDA of €100m. The Swiss asset manager will continue to hold a majority stake in the business.

The rationale behind the transaction is ISP's need for additional equity capital to continue its buy-and-build strategy, Partners Group managing director Andrew Deakin told Unquote, adding that some of Partners Group's LPs that are currently invested in ISP were unable to provide this additional capital because of portfolio management considerations. The transaction was therefore structured as an extension of ownership, involving a sale by the currently invested Partners Group clients, followed by a reinvestment by some of these clients alongside newly incoming clients and Omers as a minority third-party investor, Deakin said.

Partners Group set up ISP in 2013 to create a platform in the private education sector from scratch, according to Deakin. Since then, ISP has acquired 46 schools in 25 transactions and built four schools. "Partners Group recognised early on that the K-12 school market had strong fundamentals due to the rising demand globally for high-quality education and the non-discretionary nature of education spend for many parents," Deakin said.

Following a flurry of education sector deals in Q1 2021, Unquote reported on the drivers behind sponsor interest in the sector, which include digitalisation potential and the reliability of long-term demographic trends. At the time, 10 buyout deals totalling more than €700m had been completed in the sector, according to Unquote Data.

Partners Group said the funds raised from the transaction would predominantly be used to sustain the company's platform-building strategy. 

"ISP has a strong acquisition pipeline with several potential near-term opportunities and attractive targets identified across its regional clusters, which include Europe, the US, Canada, Mexico, Central America, South America, the Middle East, and south-east Asia," Deakin said. "The impact of Covid-19 may also create new opportunities for ISP to acquire smaller school groups and single schools that are facing financial pressures and see the long-term benefit of joining a larger platform."

Partners Group said it will continue to lead the implementation of that plan alongside the management team. It added that the key value creation initiatives following the deal will be the ongoing investment in learning and technology, further improvements to the physical infrastructure of schools, and M&A.

Company
Founded in 2013 and headquartered in the UK, ISP currently operates 50 schools across 15 countries, serving 45,000 students aged up to 18 years old. The schools employ 7,000 staff and are located in the US, Canada, Italy, Spain, Switzerland, the UK, Chile, Colombia, Costa Rica, Ecuador, the UAE, Qatar, Malaysia, Mexico and Peru.

People
Omers Private Equity – Jonathan Mussellwhite (senior managing director).
Partners Group – Andrew Deakin (managing director).

Advisers
Vendors - Sidley Austin, Eleanor Shanks (legal).

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