EUROPEAN private equity firm Bridgepoint has agreed to buy pre-university training provider Cambridge Education Group (CEG) from Palamon Capital Partners in a deal worth £185m.
Bridgepoint said yesterday that the international student market offered long-term sustainable growth, with increasing demand for UK and US university degrees from emerging middle classes in high growth economies such as China, Brazil and Russia.
The British government estimates the UK education export industry alone is worth £17.5bn a year.
London-based Palamon, which invests in service businesses and bought a majority stake in CEG in 2007, said the sale would generate a return on investment of 14.6 times and a capital gain of £141m.
Managing partner Louis Elson told City A.M.: “It’s the type of deal every dealmaker dreams about. It’s been smooth from start to finish.”
He added: “There’s a burgeoning middle class with kids and they’re newly wealthy – they think, ‘what’s the greatest thing I can give to my kids?’ and that’s a British education. The greatest education in the world is in the UK.”
Set up in 1952, CEG provides preparatory education to international students from more than 95 countries planning to attend universities in the UK, continental Europe and the US.
CEG’s revenues have grown five-fold since 2007, to an estimated £90m.
“Our investment will provide the team with additional financial capacity and reach to accelerate its push further into international markets and realise its ambitions in a growing market,” Bridgepoint’s Chris Busby said.
Slaughter and May advised Palamon. Macfarlanes advised the CEG.