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GEMS wants an education in listing: Reuters
Posted on Monday, 04 December 2017 14:47
Private equity-backed UAE international private school operator GEMS Education is weighing up an overseas listing in 2018, Reuters reported, after securing a USD 1.25 billion loan.

Sources with knowledge of the situation told the news provider the Dubai-based pre-school, primary and secondary education provider has also hired JPMorgan, Credit Suisse and Bank of America Merrill Lynch for the debut.

They added GEMS may hold an initial public offering (IPO) in London next year that could give a market capitalisation of between USD 4.50 billion and USD 5.00 billion.

According to Reuters, the company’s shareholders are looking into “the possibility of an offering of securities” but a decision on whether to proceed has not yet been made.

Private equity-backed GEMS secured a loan of USD 1.25 billion, which includes a five-year revolving credit facility, for future business growth and to refinance existing borrowings.

The group’s syndicated transaction was led by Abu Dhabi Islamic Bank, EmiratesNBD Capital, HSBC Bank Middle East, MashreqBank and Noor Bank, and supported by a group of international and regional financial institutions.

In the audited financial year ended August 2017, GEMS generated revenue of USD 926.20 million, compared to USD 789.70 million in FY 2016.

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) totalled USD 261.60 million (FY 2016: USD 212.80 million).

It had net debt of USD 724.00 million at 31st August 2017, and posted net leverage of 2.8x net debt to adjusted EBITDA.

Along with acquiring Wesgreen International School in February, GEMS has also bought three school leases, and school uniform, catering and swim training businesses during the year.

There have already been 39 global IPOs within the education sector this year, according to Zephyr, the M&A database published by Bureau van Dijk.

Zephyr shows the majority of these were by Chinese companies, or those based in this country but which listed through an offshore vehicle.

In terms of IPO hopefuls from within the region, nurseries, primary and secondary schools operator Al Najah Education told Arabian Business earlier this year it wants to expand first before pursuing a listing.

© Zephus Ltd