Brookfield-led Consortium Enters into an Agreement to Invest in GEMS Education, Partnering with the Varkey Group

A consortium led by Brookfield Asset Management Ltd. (NYSE: BAM, TSX: BAM), through its Special Investments (“BSI”) and Middle East private equity programs (together “Brookfield”), including Gulf Islamic Investments, Marathon Asset Management, and  the State Oil Fund of the Republic of Azerbaijan (SOFAZ), has today entered into a binding agreement, subject to certain closing conditions, to invest in GEMS Education (“GEMS” or the “Company”), partnering with the Varkey Group.

Completion of the transaction is expected in Q3 2024 and is conditional on satisfaction of certain conditions by all parties.

GEMS has grown from a single school, following the arrival of the founding family as teachers in Dubai in 1959, to become one of the world’s largest providers of private K-12 education, educating 140,000 students. The Company offers various international school curricula across multiple price points, with adjacent services including school transportation and after-school activities.

GEMS has simultaneously secured financing commitments from a consortium of UAE banks to finance the transaction, including funding the repayment of GEMS’ existing financing arrangements. The Company’s existing minority shareholders, including Khazanah Nasional Berhad, will exit as part of this transaction and funds managed by CVC Capital Partners will also substantially exit their stake in the company.

Sunny Varkey, Founder, GEMS, said: “GEMS has experienced significant growth over our 65-year history and has become one of the world’s most respected education companies. As a long-term, operationally focused investor, Brookfield’s partnership with the family and the GEMS community demonstrates the breadth of the business, the quality of the education, and the critical infrastructure that we deliver for the UAE.”

Dino Varkey, Group Chief Executive Officer, GEMS, said: “Providing a truly world-class education is our singular purpose at GEMS Education. Our impact in the world today has never been stronger, and that has been made possible by our exceptional team. We are well positioned for future growth, thanks to a supportive operating environment that is driving record enrolments, underpinned by a strong UAE economy and a growing population. We believe that Brookfield is the right investment partner to help us realise our ambitions as we look to the next phase of growth.”

Jad Ellawn, Managing Partner and Regional Head, Middle East, Brookfield, said: “The investment in GEMS marks a milestone for Brookfield and our private equity business in the Middle East, underscoring our commitment to investing in this high-growth region and the strength of our local partnerships.”

Dev Santani, Managing Director, Brookfield Special Investments, continued: “With its scale, industry leadership and stable, recurring cash flows, the GEMS transaction provides an opportunity to combine our deep local presence, operating expertise and Brookfield’s global ecosystem with the strategic, flexible capital solutions offered though our Special Investments program to support the company’s growth. We look forward to working alongside the Varkey Group and our partners as we embark on GEMS’ next chapter.”

Holders of GEMS MENASA Cayman Ltd (“GMCL”) Senior Secured Notes should note that this statement does not constitute a formal notice of redemption. GMCL will confirm details of the refinancing upon the transaction becoming unconditional but note that any repayment will be effected no earlier than 31 July 2024.

GEMS Education was advised by deNovo Partners, Goldman Sachs.

Varkey Group was advised by Westgrove Partners.