Brookfield Consortium To Invest In GEMS Education, Marks New Chapter

In a significant move in the education sector, GEMS Education, known for its extensive network of private K-12 schools, has entered into a definitive agreement with a consortium led by Brookfield Asset Management Ltd. This group, which includes Gulf Islamic Investments, Marathon Asset Management, and the State Fund of the Republic of Azerbaijan (SOFAZ), aims to invest in GEMS, aligning with the Varkey Group's vision. This partnership is poised to mark a new chapter in GEMS' history, enhancing its commitment to providing world-class education.

The investment Brookfield and its partners is contingent on meeting specific conditions, with the transaction's finalization anticipated in the third quarter of 2024. This strategic move is supported by financing commitments from a consortium of UAE banks, which will also facilitate the repayment of GEMS' current financial obligations. The transition will see the exit of GEMS' existing minority shareholders, including Khazanah Nasional Berhad, and a substantial reduction of CVC Capital Partners' stake in the company.

From its modest beginnings in 1959, when the founding family started teaching in Dubai, GEMS has grown into a global leader in private K-12 education, now educating 140,000 students. The company offers a diverse range of international curricula at various price points, alongside complementary services like school transportation and after-school activities. This expansion underscores GEMS' evolution into a respected name in the education industry.

Sunny Varkey, the founder of GEMS Education, expressed pride in the company's growth over its 65-year history, emphasizing the quality of education and infrastructure it provides in the UAE. He highlighted Brookfield's role as a long-term investor, recognizing its contribution to GEMS' future success. Meanwhile, Dino Varkey, GEMS' CEO, spotlighted the institution's commitment to delivering top-tier education, attributing its current impact and future growth prospects to a supportive operating environment and the UAE's robust economy.

Brookfield's engagement in this venture is seen as a testament to its investment strategy in high-growth regions like the Middle East. Jad Ellawn, Brookfield's Regional Head in the Middle East, acknowledged the significance of this investment, highlighting the firm's commitment to local partnerships. Dev Santani of Brookfield Special Investments pointed out GEMS' industry leadership and stable cash flows as key factors for the investment, expressing enthusiasm about supporting GEMS' growth alongside the Varkey Group.

Noteholders of GEMS MENASA Cayman Ltd ("GMCL") are informed that this announcement does not serve as a formal notice of redemption. Details on the refinancing will be shared once the transaction's conditions are fully met, with any repayments not occurring before 31 July 2024. The advisory roles for this transaction were undertaken by deNovo Partners and Goldman Sachs for GEMS Education, and Westgrove Partners for the Varkey Group.

This strategic partnership between GEMS Education and the Brookfield-led consortium represents a significant development in the private education sector. It not only highlights the attractiveness of GEMS as an investment opportunity but also reinforces the company's position as a leading provider of quality education. As the transaction moves towards its completion, the education community watches closely, anticipating the enhanced offerings and growth this partnership will bring to students across the globe.