By Matthew Knott, News Editor of Study Travel Magazine

In September 2013 issue of Study Travel Magazine, we explored takeovers and mergers within the study abroad industry, and there was general agreement among contributors to that article that takeovers would gather pace in the coming years.

As well as takeovers of schools by larger chains, we are seeing growing numbers of private equity firms investing in the industry. This week gives us another example, as Bridgepoint, a European equity firm, have purchased the majority stake in the Cambridge Education Group (CEG) for UK£185 million (US$302 million) from Palamon, another private equity investor that had acquired CEG in 2007.

The fact that the fee represented 11 times the current year forecast EBTIDA (earnings before tax, interest, depreciation and amortisation) suggests that quite a bidding war has taken place, with firms from inside and outside the industry reputedly involved.

Palamon achieved a return-on-investment of 14.6 times on their initial outlay in CEG, and reports that turnover has increased five-fold in those seven years, so it is not difficult to see the attractiveness of study abroad companies to potential investors. The fact that CEG’s growth came during a period of world recession typifies the study abroad industry’s robustness in the face of economic factors, surely another incentive for investors.

Elsewhere this week, we have a ‘View from the desk of…’ piece by Androulla Vassiliou, the European Commissioner for Education, Culture, Multilingualism and Youth, detailing the increased investment in the Erasmus+ study abroad funding scheme.

While agents don’t generally get involved with Erasmus, this is nonetheless a welcome development if it fosters an interest in language and study overseas. Recently, I interviewed the Deputy General Secretary of the German Academic Exchange Service DAAD for a forthcoming feature on student mobility at tertiary level (look out for the February issue!). He advised me that, full degree, fee-paying study abroad for German students rises in tandem with increases in Erasmus-funded study abroad, rather than being threatened by it.

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