A British buyout group is on the cusp of closing a deal to acquire BPP University from its private equity-backed parent, EducationInvestor Global can reveal.
This publication has learnt that TDR Capital is in advanced discussions with Vanta Education, which is backed by The Vistria Group and Apollo Global Management, around a takeover of BPP University.
Two sources confirmed that an acquisition could be finalised “within weeks”.
Three sources told this publication that private equity giant KKR had also been in talks with Vanta Education about a potential acquisition of BPP University through its Global Impact fund.
However, it is understood that TDR Capital has pulled ahead of the competition and is now in the pole position to acquire BPP University in an off-market deal.
TDR Capital offered “no comment” when contacted by EducationInvestor Global. KKR did not respond to a request for comment. Vanta Education had not responded to a request for comment at the time of publication.
BPP is one of just a handful of for-profit universities in the UK. It specialises in law, business and technology, nursing and health and operates subsidiaries in China, Hong Kong, Singapore, Malaysia, the US, South Africa and South America. The institution also offers degree-apprenticeships and executive training.
A sale of BPP University – which is not guaranteed – would mark its first change of ownership in over a decade since the institution was acquired in 2009 by Apollo Group, the name under which Vanta Education formerly traded.
Apollo Group paid approximately $607 million for BPP University, which at the time was equal to around £365 million.
While the enterprise value that would be attributed to BPP University under a deal with TDR Capital is unclear, earlier processes involving the organisation offer clues.
In January, EducationInvestor Global exclusively reported that Vanta Education was seeking to refinance BPP University’s property portfolio via a £255 million sale-and-leaseback deal with a US debt fund. (It is unclear, however, whether or not this completed.)
The property refi had been explored amid efforts to reduce the asking price for BPP University after earlier attempts to sell the business failed because prospective investors baulked at the original £500 million-plus price tag.
A competitive auction of BPP University led by Morgan Stanley collapsed in the second half of 2019, before an attempt at an off-market takeover by BC Partners, a buyout firm, was abandoned last year due to a dichotomy on pricing.
By offloading BPP University’s portfolio of freehold properties, Vanta Education would have been able to realise some value in a transaction unrelated to a sale of the operating company, it was understood.
Sources said in January that, discounting the value of its freehold properties, BPP University could be sold for less than £450 million.
EducationInvestor Global reported in January that BPP University would return to market in an auction headed up by Morgan Stanley if an off-market sale could not be agreed.
A takeover of BPP University by TDR Capital would draw a line under speculation that the institution could once again be put on the block later this year.
Headquartered in London, TDR Capital is a private equity house with more than €8 billion of committed capital whose portfolio spans a range of industries, including hospitality, retail, housing and leisure.
TDR Capital owns EG Group, the global convenience and forecourts retailer, alongside Mohsin and Zuber Issa, the two brothers who hit headlines recently following their highly leveraged £6.8 billion takeover of British supermarket chain Asda.
According to filings with Companies House, Vanta Education, which operates for-profit colleges and universities in Australia, Brazil, Chile, Mexico and South Africa as well as the UK, recorded profit of £141 million in the year ended 31 August 2020.
Date published: 8 March 2021