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Global private equity fund (PEF) manager KKR recently agreed to acquire control of Southeast Asia international school chain XCL Education for about $1.3 billion (about 1.9 trillion won). XCL operates international and private schools in Singapore, Malaysia, Thailand and Vietnam, with Singapore as its base.
Since last year, global private equity funds have been pouring large sums into international and private school platforms. The international school market, especially in Asia, is growing fast, and investors see appeal in the steady flow of tuition income and the sector's relative resilience to economic cycles.
◇ Nord Anglia acquired by EQT is valued at 21 trillion won
According to the investment banking (IB) industry on the 11th, KKR recently signed a share purchase agreement (SPA) to acquire a majority equity in XCL Education for $1.3 billion.
KKR is said to be arranging $500 million in acquisition financing to close the deal. The acquisition financing matures in five years.
XCL is a Southeast Asia school chain headquartered in Singapore, with shareholders including Singapore state investor Temasek. It operates international schools, private schools, kindergartens, and academic enrichment programs. Representative schools include XCL World Academy in Singapore, American School of Bangkok Sukhumvit Campus, and Australian International School Vietnam. It teaches more than 20,000 students across Southeast Asia.
The controlling equity in XCL that KKR acquired was held by TPG. Global private equity funds including Warburg Pincus, Blackstone, and EQT joined the bidding, leading to a fierce contest.
Examples of global private equity investment in international and private school platforms also emerged one after another last year. A representative case is British CVC Capital's minority equity investment in International Schools Partnership (ISP). In Oct. last year, CVC agreed to acquire 20% equity in the private school chain ISP. In the process, ISP was valued at €7 billion (about 12 trillion won). That is about 3.7 times higher than the valuation (€1.9 billion) when Canada's Ontario Municipal Employees Retirement System (OMERS) invested for a minority equity stake in 2021.
In Mar. last year, an EQT consortium completed the acquisition of U.K. international school chain Nord Anglia Education. Nord Anglia operates more than 80 international schools in 33 countries across the Americas, Asia, Europe and the Middle East. Its corporate value is close to $14.5 billion (about 21 trillion won).
In addition, in Nov. last year KKR made an additional investment in Indian education platform Lighthouse Learning, bringing in Public Sector Pension Investment Board (PSP Investments) of Canada as a new investor. Lighthouse operates more than 1,850 preschools and 60 K-12 (kindergarten through high school) schools across India.
Brookfield Asset Management also executed $825 million (about 1.2 trillion won) in structured financing for Spring Education Group last year. Earlier, in 2024, Brookfield invested in GEMS Education, the most popular school chain in Dubai.
◇ Global international school tuition totals 100 trillion won a year... Half is concentrated in Asia
Behind the rush by global private equity funds into education is, first, the market's rapid growth. According to global international school data firm ISC Research, as of Jan. last year, annual tuition revenue in the global international school market reached $67.3 billion (about 99 trillion won).
One of the biggest reasons private equity favors education is stable cash flow, with steady tuition coming in every year. Also, because the strategy of scaling by adding schools around a large platform has already been proven, private equity believes it can increase corporate value after acquisition and exit. In fact, CVC presented "adding schools in areas of strong demand" as ISP's growth strategy.
Fifty-eight percent of all international schools are concentrated in Asia. The Financial Times (FT), citing ISC Research, reported that 69% of international schools opened since Jul. 2022 were concentrated in Asia. Among them, Southeast Asia is cited as the fastest-growing region for international schools, as demand for English-based education coincides with an expanding middle class.