Bain to Seek RISE Education Sale at $1 Billion Valuation

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  • Buyout firm prepares to send information to potential buyers
  • Bain also weighing $200 million IPO for Chinese education firm

Bain Capital is preparing to sell its controlling stake in Chinese education provider RISE at a valuation of about $1 billion, people with knowledge of the matter said.

The buyout firm plans to send out information on RISE, which offers immersive American English lessons at its network of after-school learning centers, to potential buyers in the next few weeks, one of the people said. It is also exploring a potential U.S. initial public offering for the Beijing-based company that could raise about $200 million as soon as the third quarter, the people said, asking not to be identified because the information is private.

Bain is seeking an exit amid a burst of dealmaking in the industry, with education providers in greater China raising more than $800 million in IPOs this year, according to data compiled by Bloomberg. Pearson Plc, the world’s largest education company, said earlier this year it’s weighing options for two English-language businesses it owns in China.

Publicly listed Chinese education companies are valued at a median 26.7 times earnings, the Bloomberg-compiled data show. Bright Scholar Education Holdings Ltd., the private school operator backed by property tycoon Yeung Kwok-keung, has risen 14 percent since it began trading in May in New York, outpacing the 5.6 percent gain in the MSCI China Index over the same period.

RISE owns 44 centers in the country and also runs a franchise business, according to its website. Bain bought its 90 percent stake in the company for $130 million in September 2013, one of the people said. A representative for Bain declined to comment.

Pearson announced in February it hired Moelis & Co. to sell its Global Education business, which offers test preparation for students. It’s also seeking partners for Wall Street English, which provides language training to adults throughout China.

Buyout firms are set to increase the volume of exits in Asia Pacific this year, with $11.5 billion of announced disposals so far compared with $15 billion in all of 2016, according to data compiled by Bloomberg. Such sales are still being outpaced by new investments, with $61.7 billion of purchases by private equity firms in the region this year, the data show.

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