Istituto Marangoni, a well-known Italian school specialized in fashion and design, with branches in China, India and the United States, will come under the control of Canada Pension Plan Investment Board, Montagu, Téthys Invest and Bpifrance. In fact, this group of investors has entered into exclusive negotiations with Providence Equity Partners to acquire the controlling stake of the Galileo Global Education group, the main European group in private education in the fashion, art, design and media fields (see the press release here). In particular, Canada Pension Plan Investment Board and Téthys will control 40% each. Téthys Invest is the operating arm of Téthys, holding company of the Bettencourt Meyers family, reference shareholder of L’Oréal. Both Téthys Invest and Bpi France were already shareholders of Galileo. The group auction started in February and was managed by Goldman Sachs and Rothschild. The deal is expected to close by the middle of the year.
Providence had been in controll of the Istituto Marangoni since 2011, when it had bought it from the listed US group Career Education Corporation, while in 2017 it had also bought the Italian schools Domus Academy and Naba, in turn now part of the Galileo group.
Galileo is one of the largest private educational groups in Europe, is based in Paris and manages a network of 42 schools in ten countries including, in addition to the Marangoni Institute, the Paris School of Business and Macromedia University in Germany. Last October 2019 Galileo raised a 700 million euro loan due in 2026 to refinance the existing debt, finance acquisitions and pay a 90 million euro dividend to the shareholders, as well as a new 100 million revolving credit line to deadline 2026 (see Moody’s report here).
The group is valued at around 2.5 billion euros, based on an ebitda of 130-140 million euros and a multiple of almost 20x (see Reuters here). The price is not surprising. In this sector multiples are very high indeed. Recall for example that last Summer 2019 CVC Capital Partners took over 50% of Multiversity, the holding company of Danilo Iervolino which owns the Pegaso and Mercatorum telematic universities, valued at one billion euros on the basis of an expected ebitda for 2019 of 70 million ( see here a previous article by BeBeez).
Among the deals in Italy in the education sector, we remember that in September 2017, Providence had always bought Kid’s Cot srl, the company that manages a nursery school, a nursery school and an elementary school in English in the center of Milan with the brand KC School (see here a previous article by BeBeez). In August 2016, however, HIG Europe, the European operating arm of HIG Capital, had announced the sale of the International School of Europe Group to the multinational training company Inspired (see here a previous article by BeBeez). Finally, the Palamon Capital Partners fund controls 51% Business School24, the training school of Il Sole 24 Ore, of which it had bought 49% in August 2017, then rising to 51% in May 2018 (see here a previous article by BeBeez).