The Canada Pension Plan Investment Board (CPPIB), the investment arm of Canada’s largest pension fund, has bought a stake in private university operator Galileo Global Education in a deal valued at more than €2.2 billion, EducationInvestor Global can exclusively reveal.
This publication has learnt that CPPIB has taken a 40% stake in Galileo, fending off competition from suitors that included private equity houses KKR, CVC Capital Partners and BC Partners, as well as a chorus of family offices and sovereign wealth funds.
Tethys Investments, a private equity fund controlled by France’s Bettencourt family, which owns cosmetics giant L'Oréal, has upped its existing stake in Galileo from 20% to 40%, one source told this publication.
A long-term fund overseen by Europe’s Montagu Private Equity has taken the remaining 20% stake, it is understood.
Goldman Sachs and Rothschild, the investment banks running the auction of Galileo on behalf of Providence, had initially targeted a price of around €2.5 billion – around 20-times EBITDA – for the business.
However, a source told this publication that the deal was ultimately valued at 16-times Galileo’s earnings for the past 12 months, which totalled around €140 million, indicating a price tag of between €2.2 billion and €2.3 billion.
With 42 universities worldwide that cater to more than 100,000 students, Galileo is Europe’s largest for-profit university operator.
Its portfolio of institutions includes the Paris School of Business, Macromedia University in Germany and Instituto Marangoni, an Italian fashion school.
Many of Galileo’s universities specialise in arts and creative disciplines.
Instituto Marangoni has branch campuses in China, India and the US.
Last October, Galileo launched a €700 million loan to refinance existing debt, bankroll acquisitions and pay shareholders a €70 million dividend – the third dividend paid to Providence in two years.
CPPIB co-owns global school network Nord Anglia, which it acquired in 2017 alongisde Baring Private Equity Asia in a $4.3 billion take-private deal.
CPPIB could not be reached for comment.
Tethys could not be reached for comment.
Providence did not immediately respond to a request for comment.
Rothschild did not immediately respond to a request for comment.
Date published: 6 March 2020