Blackstone, Gulf Investors Buy Stake In UAE’s GEMS Education

Dubai’s Fajr Capital said that it led a group including Blackstone and Bahrain sovereign fund Mumtalakat in acquiring a “significant minority stake” in United Arab Emirates-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.

Along with healthcare, 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 focussed 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 2013 and was part of a move to prepare GEMS for an initial public offering, sources told Reuters at the time.

Money raised from the stake sale will allow GEMS to invest in Gulf markets, in particular the UAE, Saudi Arabia, Qatar and Bahrain, as well as emerging economies in south east Asia such as Malaysia, GEMS’ chairman Sunny Varkey said in the statement.

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

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