GEMS Education Sale: Abu Dhabi consortium prepares $6 billion offer

Two of the largest private school operators in the world, GEMS Education, based in Dubai, has hired Rothschild & Co. and Standard Chartered as advisers on a takeover bid, according to people familiar with the situation. Among the investors considering a joint offer for GEMS, which is backed by CVC Capital Partners, are the sovereign wealth fund ADQ and the real estate developer Aldar, which also has a subsidiary in the education sector. Another Abu Dhabi sovereign fund, Mubadala Investment Co., is a major shareholder of Aldar.
GEMS, owned by founder Sunny Varkey and private equity group CVC Capital Partners, has been working with Goldman Sachs and Morgan Stanley on a potential sale that could value the business at as much as $6bn. The Varkey group is being advised by deNovo Partners, a Dubai-based advisory firm founded by former Morgan Stanley banker May Nasrallah, two of the people said.
Aside from Abu Dhabi, other regional and international candidates are showing preliminary interest, the people said, asking not to be named because the information is private. The firm may still also opt for a stock market listing as a potential exit route, they said. Spokespeople for Rothschild, Standard Chartered, DeNovo and GEMS all declined to comment.
Varkey has been trying to offload part of his stake in GEMS in 2020 but was stymied by the global pandemic during which schools were shut down for months and many expats in Dubai initially left the emirate.
The school operator, which has around 60 schools across the Middle East and North Africa, also considered an initial public offering in 2019, but Dubai’s decision to freeze school fees in the emirate then disrupted those plans.