The owners of a cluster of for-profit universities in France have mandated bankers to offload a controlling stake in the business, EducationInvestor Global can reveal, triggering further consolidation in the country’s private higher education market.

Serge Marcillaud, founder, president and majority shareholder, and minority shareholders Azulis Capital and Aquiti Gestion, both private equity firms, have picked Rothschild to steer an outright sale of Talis Education Group, this publication has learnt.

A formal auction process is “about to start”, according to a well-placed source, who noted that “it’s an opportunity for private equity”. Trade suitors – such as higher education platforms Galileo Global Education and Global University Systems (GUS) – “won’t look at it and will not be contacted”, the insider added.

In a prospectus, Rothschild will show that Talis Education, which according to its website caters to some 2,750 students across three institutions in France, is on course to reach €12 million in earnings before interest, tax, depreciation and amortisation (EBITDA) this year, ending December 2021. A source, who described Talis Education’s year-on-year EBITDA growth as “strong”, put the group’s revenue at €30 million – indicating an EBITDA margin of around 40%.

Based on the aforementioned figures and price-to-earnings multiples at which private higher education assets have traded in recent years, a controlling stake in Talis Education would likely fetch €120-170 million at auction.

A successful sale of Talis Education to private equity would deepen the influence of institutional capital within France’s private higher education sector.

In March 2019, international buyout group Cinven acquired INSEEC, which operates four campuses in France and five overseas, for €800 million. Last March, France-based Galileo, Europe’s largest for-profit university group, was taken over by a Canadian pension fund and French family office in a €2.2 billion transaction revealed by this publication.   

The auction of Talis Education will be launched alongside the sale of a minority stake in university giant GUS, which Rothschild is also overseeing, as revealed this week by EducationInvestor Global. Rothschild is also wrapping up the sale of ACE Education, a private equity-owned group of three universities in France, final bids for which are due at the end of this month.

A spokesperson for Rothschild declined to comment on the bank’s role in the sale of Talis Education. Marcillaud had not responded to a request for comment at the time of publication.

Founded in 1978 by Marcillaud, Talis Education is a formation en alternance – dual education – provider, which blends on-the-job training with academic studies in subjects such as commerce, communication, human resources, technology, finance, fashion, banking and media.

Three institutions operating nine sites comprise Talis Education Group. Talis Business School has locations in Bergerac, Perigous, Bayonne, Bordeaux and Paris. Talis Itinerary Employment has campuses in Bergerac, Perigous, Bordeaux and Byonne. Akor Alternation operates from a single campus in Paris.

Last January, Azulis Capital and Aquiti Gestion paid €23 million for a significant minority stake – around 40% – in Talis Education from Naxicap Partners, which since 2011 had owned this portion of equity. It is understood that Marcillaud controls the remaining 60% stake.

It is unusual in private equity – a sector in which investment houses tend to hold companies for at least three-to-four years before selling – for funds to seek an exit just 12 months after investing.

“Yes, [it is] unusual, but as it is a fast-growing asset, they [Azulis and Aquiti] are ready to sell and the owner wants to leave,” a source familiar with the business explained. “It’s a very nice company that has showcased strong growth.”

Azulis Capital and Aquiti Gestion had not responded to requests for comment at the time of publication.

Date published: 12 January 2021

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