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Blog Coverage Premium Education Company Nord Anglia Education Set to be Privatized

Wednesday, 26 April 2017 08:15 AM

Active Wall Street

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LONDON, UK / ACCESSWIRE / April 26, 2017 / Active Wall St. blog coverage looks at the headline from Hong Kong based Nord Anglia Education, Inc. (NYSE: NORD) as the Company announced on April 25, 2017, that it had signed an agreement to be acquired by Bach Finance Limited. Bach Finance is owned by a consortium of funds affiliated with Canada Pension Plan Investment Board (CPPIB) and Baring Private Equity Asia (BPEA). The transaction value of the deal is approximately $4.3 billion including debt. Register with us now for your free membership and blog access at:

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One of Nord Anglia Education's competitors within the Education & Training Services space, Capella Education Co. (NASDAQ: CPLA), announced on April 25, 2017, its financial results for the three months ended March 31, 2017. AWS will be initiating a research report on Capella Education in the coming days.

Today, AWS is promoting its blog coverage on NORD; touching on CPLA. Get all of our free blog coverage and more by clicking on the link below:

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Nord Anglia is the world's leading premium school organization. It runs a network of 43 international schools, boarding schools, and private schools located in 15 countries across the world including China, Europe, Middle East, North America, and South East Asia. It caters to the education needs of more than 37,000 students who are in the age group of 2 years to 18 years. Nord Anglia has also collaborated with iconic institutions like The Juilliard School, the Massachusetts Institute of Technology (MIT), and Kings College London for post-secondary education.

Commenting on the acquisition, Deborah Orida, Managing Director, Head of Private Equity Asia, CPPIB said:

"This investment in Nord Anglia is an excellent fit with our strategy to build a diversified portfolio capable of delivering strong, sustainable returns to the Canada Pension Plan Fund over the long term. This is CPPIB's first direct equity investment in private education and through Nord Anglia we are able to gain both asset and geographical diversification."

Jean Eric Salata, Founding Partner and CEO of BPEA added:

"BPEA is passionate about making education of the highest quality available to children all over the world, and we believe Nord Anglia is the ideal partner to achieve that goal. After nine years, we have developed a thorough understanding of the business and have high conviction that Nord Anglia's future is even more promising than its past."

Details of the transaction

As per the agreement, the consortium would acquire all the outstanding shares of Nord Anglia at $32.50 in cash. The offer price represents a 18% premium of Nord Anglia's closing price of $27.62 on April 24, 2017, a day before the deal was announced. Nord Anglia's Board of Directors have already approved this deal.

The transaction has a provision for a 30-day "go-shop" period wherein Nord Anglia can explore offers from other potential suitors. A Special Committee has been formed which consists of independent directors who are not affiliated to CPPIB or BPEA. This Special Committee will study each offer received in detail and will be authorized to negotiate and even enter into agreements with them.

CPPIB and BPEA will be financing the deal using cash available with them and debt from financial institutions. There are no other financing conditions for the closing of the deal. The transaction is expected to close before August 31, 2017, which is the last day of the fiscal year for Nord Anglia. The deal is subject to approval from Nord Anglia's shareholders, and other closing conditions.

BPEA is a majority shareholder in Nord Anglia via its affiliate Premier Education Holdings Ltd who holds 67% stake and has agreed to vote in favor of the merger transaction.

On completion of the merger, Nord Anglia will delist from New York Stock Exchange and become a fully privately held entity.

Benefits for Nord Anglia

The privatization of Nord Anglia will allow it to continue to grow in the premium education sector globally. Especially as demand for quality education, in the kindergarten to grade 12 segment, rises globally. Also with the exposure and support from CPPIB and BPEA, Nord Anglia will be able to grow geographically and at the same time attract the best teaching talents. The deal will also open opportunities for collaboration with other premium education institutions, which will benefit the students and the brand tremendously. The education sector consists mostly of single-site operators, which gives a brand like Nord Anglia major opportunities to grow.

About the investors

Hong Kong based BPEA was founded in 1997 and has a total committed capital of over $10 billion. BPEA works closely with the portfolio Companies that it has invested in and helps them grow their business in the long run by way of capital for expansion, recapitalization, or strategic alternatives like acquisitions. It has invested in more than 70 Companies since its formation. It is predominantly active in Asia with offices in Shanghai, Beijing, Mumbai, Singapore, Tokyo, and Jakarta. It is supported by a global team of over 140 professionals. BPEA had already made significant investment in Nord Anglia in 2008 via its affiliates.

Toronto, Canada based, CPPIB is a professional investment management organization that invests the funds not required for payment of benefits to the contributors of the Canada Pension Plan (CPP). It also has offices at Hong Kong, London, Luxembourg, Mumbai, New York City, São Paulo and Sydney. It invests in public equities, private equities, real estate, infrastructure and fixed income instruments. CPP had a fund of $298.1 billion as of December 31, 2016. Nord Anglia is CPPIB's first direct equity investment in the private education sector.

Stock Performance

On Tuesday, April 25, 2017, the stock closed the trading session at $32.82, surging 18.83% from its previous closing price of $27.62. A total volume of 7.92 million shares have exchanged hands, which was higher than the 3-month average volume of 130.45 thousand shares. Nord Anglia Education's stock price advanced 47.11% in the last three months, 49.52% in the past six months, and 53.22% in the previous twelve months. Shares of the company have a PE ratio of 62.99. At Tuesday's closing price, the stock's net capitalization stands at $3.43 billion.

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