GEMS Education founder Sunny Varkey and private equity firm CVC Capital Partners are both looking to sell their stakes in the education giant, which could be valued as high at $6 billion.
But who are the most likely buyers?
Firstly, there is certain to be no shortage of interest. In 2021, the global education market was estimated to be worth around $86 billion. Post-pandemic – despite a huge increase in online learning – annual growth rates of 10 percent are expected for the next six years.
In the US, education industry revenues in 2020 were close to $300 billion.
So, who is knocking on Varkey’s door? Here are our leading contenders:
1. Bright Horizons
Based in Ohio, the largest provider of child care in the US – plus other products such as back up child care – would make an interesting fit. It currently has more than 1,000 child care centres and 30,000 staff, but has been eyeing a move into the mainstream education sector. Varkey would offer a fast-track entry. And the US giant has the cash, with a market value in excess of $10 billion.
2. TAL Education
The Chinese education giants is worth around $32billion and saw 2021 revenues of $4.5 billion. It serves 30 million students in China across 56 cities. GEMS is a dwarf by comparison – but pandemic induced financial losses, and the appeal of a foothold in the UAE, could be tempting for TAL.
3. New Oriental Education and Technology
Another Chinese giant, also worth $32 billion. With 45 million students on the books and a heavy focus on pre-school education, GEMS would be a neat step with plenty of synergy. With 2021 profits of $400 million it is in better financial shape than TAL Education.
4. Warren Buffett
The world’s most famous investor has a lot in common with Varkey when it comes to philanthropy. But Buffett is mostly interested in the numbers, and the GEMS numbers are good – more importantly, the growth rates in education post-pandemic make it a hot industry. Don’t rule him out.
5. Byju’s
Formerly known as “Think & Learn” it is famed for its online platform Student Hub. It is one of the most successful start-ups ever in the education sector, and widely praised for the quality of its products.
With a market value of $22 billion, we wouldn’t be surprised to see the company try and get a slice of a more established, traditional educator like GEMS. One to watch for sure.
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