Australian private equity fund Pacific Equity Partners is set to buy schools and childcare centre supplies company Modern Star in a $600 million deal. 

The buyout house and Modern Star’s owner, private equity firm Navis Capital, had been finalising the deal on Monday, the Financial Review reported.

If it closes, Pacific Equity Partners would take control of Modern Star’s Australian and New Zealand businesses, which is valued at 10-times EBITDA.

The takeover would bolster Pacific Equity Partners’ education portfolio in Australasia.

It previously owned New Zealand school and tertiary education provider ACG Education. In 2018, it sold the K12 unit of the business to Inspired Education and kept the tertiary business under the new name of UP Education.

Modern Star supplies educational resources to schools and childcare centres, with 40,000 products and more than 28,000 customers in Australia and New Zealand. Navis Capital is expected to retain the Modern Star operations in China.

It was reported that Pacific Equity Partners had committed to backing Modern Star’s existing management team under the terms of the deal.

Navis Capital acquired Modern Star in 2014 and hired bankers Luminis Partners and Morgan Stanley to run an auction last year, which failed when the pandemic hit China, where Modern Star also operates.

Date published: 8 September 2020

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