Equity firm purchases CEG for UKú185m

04 December, 2013

European private equity firm Bridgepoint is to acquire global provider Cambridge Education Group (CEG) from Palamon Capital Partners at an enterprise value of UK£185 million (US$302 million).

The fee represents around 11 times the current year forecast EBTIDA (earnings before tax, interest, depreciation and amortisation), and provides a return on investment of 14.6 times for Palamon, which purchased the majority stake in CEG in 2007.

Bridgepoint is thought to have beaten a number of bidders, including the global education provider Kaplan, to acquire the majority stake in the firm; CEG’s management retains a minority stake in the business.

According to a statement from Palamon, CEG’s revenue has grown five-fold since 2007 to an estimated UK£90 million (US$147 million) for the 2013-14 academic year. CEG has expanded to cover four divisions in three countries: the CATS College network of high school campuses in Cambridge, Canterbury, London and Boston; FoundationCampus university pathways programmes with partners in the UK, USA and the Netherlands; the Cambridge School of Visual & Performing Arts; and English language schools operating under the Stafford House brand.

As previously reported, CEG recently acquired the US-based Boston Academy of English, incorporating the school into the Stafford House portfolio.

Fergus Brownlee, Chief Executive of CEG, said, “We are delighted with what we have been able to achieve during the past seven years with the close collaboration of our supportive partner, Palamon. We have taken CEG from being a small UK platform to a market-leading brand with an international presence.

“It is our focus on quality at every stage – and the outstanding success of our students – that has made us one of the fastest growing independent education providers in the world.”

Looking ahead following the acquisition, Brownlee said, “We now have in place a strong platform for further expansion and this acquisition will allow us to progress as an organisation, while developing and maintaining local partnerships that will enable us to deliver the highest standards of academic quality our students demand. We are looking forward to working with Bridgepoint to capture the next stage of growth.”

Chris Busby, the partner responsible for Bridgepoint’s investment activity in the UK, said, “Cambridge Education Group has grown substantially, extended its teaching, targeted new markets and, importantly, delivered strong academic results. Our investment will provide the company with additional financial capacity and reach to accelerate its push further into international markets as well as help it realise its ambitions in a growing market.”

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