Apax preps INSEEC for EUR 1bn exit with Rothschild advising
- Process at teasers stage
- Cinven tested the ground earlier this year
- PE sponsors, Infra funds and family offices tipped as likely bidders
Apax has hired Rothschild to prep French education group INSEEC for an early 2019 sale process, two sources close to and two sources familiar with the situation said.
Teasers are currently being sent out to prospective bidders, one of the sources familiar said.
Sellside is marketing the target off a EUR 60m EBITDA, the first source close and the two sources familiar said. Apax is looking to sell INSEEC for a EUR 900m to EUR 1bn valuation, the two sources familiar added.
This process comes after Cinven approached the company last summer with a EUR 750m proposal that did not match the vendor’s price expectations, a third source familiar said. However, a firm offer was not tabled at the time, the first source close added.
The company is marketed as a potential build-up story as there is a lot of consolidation expected in the education sector, the first source close said. This news service reported last year that INSEEC was seeking acquisition opportunities.
Cinven, which is expected to take part in the auction, is advised by Messier Maris, while Eight Advisory and PMSI are positioning themselves to carry out financial and strategic due diligence, respectively, on the asset, the first and the third source familiar said.
Cinven declined to comment. Messier, Eight Advisory, PMSI did not respond to requests for comment.
The auction is expected to attract a wide range of private equity players, such as Advent, PAI Partners, Carlyle [NASDAQ: CG], Charterhouse and KKR [NYSE: KKR], the first source familiar said.
Infrastructure funds could also look at the asset, the first source close and the first source familiar suggested, with the latter adding that Antin and Infravia could potentially be interested.
Despite not being an infrastructure asset per se, INSEEC is interesting for such bidders, the first source close said, since a three-year education cycle allows to forecast the company’s income in the long term.
Infrastructure funds have raised a lot of money in the last few years, and now need to deploy such capital by diversifying the range of their investments, the first source close and the first source familiar said.
Family offices, which are usually long-term investors in search of safe investment opportunities, might also show an interest in the company, the same sources said, adding that similar deals have already been closed recently.
In April 2018, the Bettencourt family office Thetys reportedly acquired a less than 25% stake in Providence-backed Galileo Global Education group. Similarly, Swiss family office Jacobs Holdings announced the acquisition of UK-based school group Cognita from KKR and Bregal, as reported.
Belgian family-owned group D’ieteren [EBR: DIE] could also be interested in the asset, the first source familiar suggested.
Advent, Antin and Charterhouse declined to comment. D’ieteren, Infravia, PAI, Carlyle and KKR did not respond to requests for comment.
Although the asset is too France-focused to be of interest for standalone Asian bidders, such players might be useful as minority shareholders to help potential bidders reach the expected EUR 1bn threshold, the first source familiar said.
Apax is closely watching the auction process of Laureate’s [NASDAQ: LAUR] Spanish portfolio before launching its own process, the same source added. Goldman Sachs, which is handling this process, has admitted CVC, Bridgepoint, Permira, Barings, Providence, Cinven and Partners into the second round of the auction, as reported.
INSEEC was reportedly acquired by Apax in 2013 from Career Education Corporation for a EUR 200m consideration.
INSEEC’s sales for the 2017-2018 school year stood at EUR 220m, according to Apax’s wesite.
Apax and Rothschild declined to comment.