Neuberger Berman Nears Deal For International-School Operator at $15 Billion Valuation
Nord Anglia Education operates a global network of schools including several in the U.S. with annual fees of up to $70,000
U.S. asset manager Neuberger Berman is nearing an agreement to buy a minority stake in Nord Anglia Education, in a deal that values the international-school operator at $15 billion, including debt.
The details
Neuberger is in talks to buy the position from Nord Anglia’s existing shareholders including EQT, a big European buyout firm—which will retain control of the business—and Canada Pension Plan Investment Board, according to people familiar with the matter. The deal, if completed, could be announced in the coming weeks.
The Wall Street Journal couldn’t verify the precise size of the stake that Neuberger Berman is seeking to acquire.
Nord Anglia oversees a network of more than 80 international day and boarding schools across some 30 countries. That includes 11 institutions in the U.S. that charge annual tuition fees ranging from $8,600 at the British International School of Chicago, Lincoln Park to almost $70,000 at North Broward Preparatory School in Coral Springs, Fla., according to the company’s website.
It also has a partnership with IMG Academy, the Florida sports school that EQT bought last year from UFC owner Endeavor Group Holdings for $1.25 billion including debt. Nord Anglia’s schools have access to IMG’s sports curriculum as well as its 400-acre campus as part of the agreement.
The context
EQT inherited Nord Anglia through its $7.5 billion deal in 2022 to buy rival private-equity firm Baring Private Equity Asia. Baring and the Canadian pension fund acquired the business in 2017.
That means Nord Anglia has been in private-equity hands for about seven years. Typically, a buyout firm holds a business for five to seven years before looking to cash out. A combination of high interest rates and shaky market conditions, though, put many potential deals on pause in 2023.
That has placed more pressure on buyout shops to reignite dealmaking this year to return money to their investors and take advantage of banks’ greater willingness to fund deals.
The Neuberger deal allows EQT and other Nord Anglia investors to realize a portion of their investment while betting on the business’s growth by retaining control. This type of deal structure is often used by buyout firms for their most favored investments.
The rationale
Neuberger, which is based in New York, oversees almost $420 billion in assets, of which more than a quarter is allocated to private-equity investments. The Nord Anglia deal would offer the asset manager a consistent source of income, because of relatively steady school demand, plus exposure to growth in the business from its expansion into new markets, among other means.
The global primary and secondary private-education market is forecast to be a $12.7 billion business in 2030, up from $7.5 billion in 2022, according to Fairfield Consultancy Services, a market research firm.
Neuberger’s other areas of investment include public equities, private credit and real estate.