Laureate Education is to sell its Brazilian portfolio to Ser Educacional S.A. for $724 million, paid in cash and stock, as the private university operator steams ahead with its divestment strategy.

The announcement on 13 September came just days after the Nasdaq-listed company announced the sale of Walden University, an online healthcare training provider, to Adtalem Global Education, worth $1.48 billion.

Last week, Laureate also completed the divestment of its Chilean operations to a non-profit entity, a transaction valued at more than $214 million.

The sale of Laureate’s 11 Brazilian institutions, which collectively enrol more than 267,000 student in technical, undergraduate and postgraduate programmes, is the latest link in a chain of divestments made in recent years in an effort to clear debt from its balance sheet.

Under its deal with Ser Educacional, Laureate will receive R$1.7 billion (£250 million) in cash and 101,138,369 shares of Ser Educacional – meaning that, when the transaction closes, Laureate will own around 44% of the organisation.

By funding part of the deal with shares, Ser Educacional is transferring a portion of the transaction risk to Laureate.

Under the arrangement, Ser Educacional will delist its American depositary shares, it said.

The deal is subject to customary conditions, including regulatory approval, and includes a 30-day ‘go-shop’ period in which Laureate and its advisors may “enter into negotiations that may yield alternative acquisition proposals”.

The transaction is targeted to close towards the end of 2021, Laureate said.

Goldman Sachs is serving as exclusive financial advisor to Laureate on the sale, and Veirano Advogados, Demarest Advogados, Simpson Thacher & Bartlett LLP and Jones Day are acting as legal advisors.

Commenting on the transaction, president and chief executive of Laureate, Eilif Serck-Hanssen, said: “This transaction resulted from our exploration of strategic alternatives for each of Laureate’s businesses.

“We are incredibly proud of our Brazilian institutions and their enduring impact on the lives of their students. They demonstrate the best of Laureate’s commitment to deliver quality at scale, and we believe each of these institutions is well placed to continue to expand on Laureate’s legacy in Brazil.”

Year-to-date, Laureate’s share price is down 28% at $12.75.

Since a strategic review of its portfolio was launched in January, Laureate has divested its operations in five geographies: Australia, New Zealand, Chile, Brazil,Malaysia and the US.

Date published: 15 September 2020

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