The owners of Brookhouse School have sold the institution to Educas, a United Kingdom-based private equity fund, for Sh3.6 billion, making it one of the biggest transactions in Kenya’s high-end education sector.
Among those who sold their interest are the school’s founder Piyush Mehta, who held a 25 per cent stake in the institution, and Victoria Bank, whose stake stood at 20 per cent.
Others include PE firm AfricInvest, which held the single largest interest of 30 per cent in the institution that offers the British curriculum to learners from rich and upper middle class households.
AfricInvest was part of a consortium of investors that acquired a combined 75 per cent stake in Brookhouse from the Mehta family in 2010.
The deal underlines the lucrative returns earned by PE funds in Kenya, with AfricInvest more than tripling its five-year investment in the institution.
“AfricInvest is pleased to announce that its AfricInvest Fund II, along with other shareholders, has successfully concluded its exit from Brookhouse Schools to UK-based Educas LLC in August 2015,” reads part of a statement announcing the transaction.
AfricInvest received Sh1 billion in the buyout, a return of 212 per cent on the Sh346.1 million it paid for a 30 per cent stake in 2010.
The PE firm did not disclose its original investment but the Business Daily established the figure from a review of AfricInvest’s investment in Brookhouse by Canada-based asset manager Sarona Fund.
The Mehta family is expected to have made the highest return, receiving Sh900 million in the latest buyout, which has completed its exit from the school it founded in 1981.
Victoria Bank, which is associated with the family of managing director Yogesh Pattni, received Sh720 million in the deal. The buyout signals increased investor interest in Kenya’s high-end private education business where the last major transaction was the 2011 takeover of Hillcrest International Schools by PE firm Fanisi Capital for an undisclosed amount.
Beirut-based family business Sabis has also announced plans to enter the local private education business in the near term through a partnership with Dubai-based asset manager Investbridge and Nairobi Securities Exchange-listed investment firm Centum.
For Educas, the acquisition of Brookhouse is part of its global expansion after the fund was established in 2013 by Nadim Nsouli who received backing from institutional investors including London-based PE firm Oakley Capital, which has €750 million (Sh87 billion) under management.
Educas also recently acquired an undisclosed stake in Bogota-based Colegio San Mateo, a private school in Colombia.
The Brookhouse purchase brings the PE group’s total number of schools to six, including Reddam House (South Africa), Bearwood College (UK) and a chain of early learning schools in Australia.