Global private equity buyout funds General Atlantic and KKR & Co are in separate discussions to acquire about 75% stake in preschool chains EuroKids, Kangaroo Kids and Billabong High, according to two people aware of the development. EuroKids owns Kangaroo Kids and Billabong High.
The PE funds are in talks to acquire stakes held by domestic private equity fund Gaja Capital and Swiss fund Partners Group, expected to be valued at $200 million (Rs 1,400 crore). Euro-Kids has a network of 1,000 schools.
Avendus Capital is advising the investors on finding a potential buyer.
Others who had evinced interest include Blackstone Group and Baring Private Equity Asia, said one of the persons cited above. However, KKR and GA are the ones in serious contention, he added. ET had reported in September that the PE funds had put their stake in EuroKids on the block and hired Avendus Capital.
While existing investors are looking to sell their five-year-old investment, promoters will stay with the company as minority shareholders. Founded by Prajodh Rajan and Vikas Phadnis in 2001, the EuroKids Group manages its own preschools and schools and also operates through the franchise model in India. The group clocked revenue of Rs 350 crore in FY18. Gaja Capital, which acquired 50% in EuroKids in 2013 along with its Swiss investor Partners Group, increased stake in five years to about 75%.
EuroKids Group consists of Eurokids International Pvt, Euroschool Properties & Infrastructure, Euroschool International, Euroschool Foundation, Euroschool Education Trust, Kangaroo Kids Education and Lina Ashar Foundation.
The 11-year-old EuroKids had acquired preschool chain Kangaroo Kids and Billabong High International Schools last year. Kangaroo Kids has a network of 79 preschools and Billabong has one of 21schools.
In the organised preschool market, EuroKids competes with brands such as Amelio, Kidzee, Little Elly, Lily Candies, Little Einsteins and several others.
EuroKids has an 85% occupancy in the current academic year, with more than 90,000 students enrolled in its campuses against 84,126 in the previous year.
EuroKids has a presence in 360 towns in India, Nepal and Bangladesh while EuroSchool runs a chain of 10 K-12 schools in six Indian cities. Billabong is present in Qatar, Dubai, the Maldives and Saudi Arabia.
Spokespersons at Blackstone, Baring PE Asia, Gaja Capital, Partners Group, Avendus Capital, KKR, GA and EuroKids chief executive Rajan declined to comment.
Source: Economic Times