The education industry is hot – and there is money exchanging hands to prove it.
In a significant deal in the sector betting on parents willing to put more money to groom their children, real estate developer AEZ Group has acquired 50 per cent in Delhi-based pre-school chain Mother’s Pride at between Rs. 250 and 300 crore, mirroring high valuations of private education firms despite the current economic downturn.
AEZ did not disclose the exact figure.
Mother’s Pride, which runs 25 branches across the National Capital Region, has been valued between Rs 500 crore and Rs 600 crore. It has annual revenues in excess of Rs. 80 crore.
“This is the right sector for investment where revenues are growing at more than 50 per cent across the industry,” Sanjeev J Aeren, managing director, AEZ Group told Hindustan Times.
Significantly, the deal could well mark the beginning of a pattern in which embattled real estate firms, caught between low demand and high debt, look to the education business in which revenue growth is higher.
“We have joined hands for a partnership where AEZ will add the infrastructure,” Sudha Gupta, chairperson, Mother’s Pride, told Hindustan Times.
“We are headed for a very fast growth and plan to add 100 branches across India over the next three to five years.” She added that the school chain is eyeing overseas expansion as well although plans have not been finalised as yet. The chain has 14,000 students on its rolls and plans to have close to 1,00,000 students on board over the next five years.
The stake has been sold on a deferred payment plan spread over six years and close to 30 per cent of the all-cash deal has already been paid for.
AEZ Group has raised Rs 150 crore through internal accruals.