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Global Private School Operator GEMS Said in Early IPO Talks

  • GEMS said to speak with advisers on potential listing
  • A public share sale could take place as early as next year

GEMS Education, one of the biggest private school operators, is in the early stages of preparing for an initial public offering, according to people familiar with the matter.

GEMS is talking to advisers about a potential listing, the people said. An IPO could take place as soon as next year, one of the people said. No final decision has been made, and GEMS may also decide against selling shares if market conditions are unfavorable, they said.

A representative for GEMS didn’t respond to a request for comment.

The company, which operates more than 80 schools across 14 countries, is expanding after selling stakes to private equity firms, including Blackstone Group LP, in 2014. GEMS raised $250 million to build new schools in the Gulf Cooperation Council member states and other countries, people with knowledge of the deal said last month.

Revenue rose 13 percent to $466.8 million in the six months through the end of February, driven by higher student enrollments and revenue per student, GEMS said in a statement to the Nasdaq Dubai last month. Total student capacity across its schools was 111,652, according to the statement.

“Dubai continues to be very attractive for private school operators and needs investment of over $1 billion by 2020 to keep up with demand for school places,” said Ashwin Assomull, a partner in Mumbai for London-based management consultants Parthenon Group. “GEMS has a strong market position and we have already seen other private school operators approach the equity markets for funding.”

Sovereign wealth fund Bahrain Mumtalakat Holding Co. and Dubai-based Fajr Capital Ltd. joined Blackstone in the purchase a significant minority stake in GEMS’s emerging markets business in the Middle East, North Africa and East Asia, in 2014.

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