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Abu Dhabi, UAEMonday 22 October 2018

Fajr-led group takes stake in UAE-based Gems Education

Along with health care, education is viewed as one of the fastest-expanding industries in the Middle East.

Dubai’s Fajr Capital said that it led a group including Blackstone and the Bahrain sovereign fund Mumtalakat in acquiring a “significant minority stake” in UAE-based Gems Education.

No price for the deal was given in the statement posted on Fajr’s website on Wednesday, which said Blackstone had made its investment through its Tactical Opportunities fund.

In August, sources said that a deal for 20 per cent of the company valued at about US$350 million was close to being agreed.

Along with health care, education is viewed as one of the fastest-expanding industries in the Middle East as growing populations and burgeoning wealth create demand for high-quality services previously in short supply locally.

Gems operates more than 50 schools across 19 countries in the Middle East, North America, Europe, Asia and Africa, the statement said.

Under the transaction, Gems will be split into two entities, with the investing group buying a stake in the part of the business focused on the Middle East, North Africa and Asia. The other sector will hold Gems assets in Europe and North America.

The move reverses the merging of the two businesses, which took place at the start of last year and was part of a move to prepare Gems for an initial public offering, sources said at the time.

Money raised from the stake sale would allow Gems to invest in Arabian Gulf markets, in particular the UAE, Saudi Arabia, Qatar and Bahrain, as well as emerging economies in South East Asia such as Malaysia, said the Gems chairman Sunny Varkey.

In September last year, Mr Varkey said that his company was hoping to raise up to $500m from the sale of a 20 per cent stake in the schools operator.

The consultants Deloitte and law firm Allen and Overy advised Gems on the deal, with Barclays, the lawyers Freshfields Bruckhaus Deringer and consultancy KPMG acting on behalf of the buying group.

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