Gaja Capital in final stages of discussions to invest $20 million in Kangaroo Kids
NEW DELHI/BENGALURU: Mid-stage private equity firm Gaja Capital is in the final stages of closing a $20 million (about Rs 133 crore) investment in pre-kindergarten and K-12 school chain Kangaroo Kids Education Limited, people aware of the development said.
The deal, which is likely to be the fourth transaction by Gaja Capital from its latest fund - the $240 million Gaja Capital III— marks a busy year for the Mumbai-headquartered private equity investor, three of whose portfolio companies have made their market debut over the last 12 months.
One such portfolio company, education services firm CL Educate, crossed the one-third mark on Monday, the first day of its initial public offering. The others that made strong market debuts include RBL and TeamLease, whose issues were oversubscribed by 70 and 66 times, respectively.
The persons cited earlier could not comment on how much stake Gaja Capital will hold in Kangaroo Kids if the deal materialises, or the valuation of the company after the transaction is closed.
Gopal Jain, managing partner at Gaja Capital, declined to comment on the matter.
A query on the transaction posted on the website of Kangaroo Kids remained unanswered till as of press time.
Kangaroo Kids, founded in 1993 by Lina Ashar, is one of the largest pre-kindergarten and K-12 school chains country. It has presence in Dubai, Maldives and Qatar too. Under its pre-school business, it claims to serve 9,000 students across 79 schools in 20 cities in India, Dubai and Maldives. It also has 16 K-12 schools under the 'Billabong High' banner.
"The concept (of Kangaroo Kids) is still a valid one. Early childhood education is picking up. I am glad they persisted and did not give up," said Narayanan Ramaswamy, partner and head of education, KPMG in India. "At a generic level, education is going to expand. It is going to see growth. (Investment needs) basic parameters- do they have growth, can they make money, is it sustainable. If yes, it sticks very well."
The investment in Kangaroo Kids is likely to be one of the largest in the education space after the unravelling of Subhash Chandra-backed Zee Learn's proposed merger with preschool chain Tree House Education and Accessories in December last year. At the time, Zee Learn, reportedly, cited multiple media reports about the sudden closure of Tree House' play schools, the latter's worsening financials and allegations of irregularities, as the reasons for calling it off.
For Gaja Capital, which has a strong investment focus on the broader education sector, the transaction is expected to be the first in the space, since it invested about Rs 65 crore in sports and fitness education venture SportzVillage in October 2015.
Apart from CL Educate and SportzVillage, the PE firm also counts education brand EuroKids and Team Lease Services in its portfolio.SportzVillage, the PE firm also counts education brand EuroKids and Team Lease Services in its portfolio.
From Gaja III, the investment firm has backed small finance bank licensee Suryoday Micro Finance, having invested Rs 30 crore in it in September last year. It is also an investor in frozen bakery and confectionery producer and supplier Bakers Circle.
Post the close of its third fund in March last year, Gaja Capital, which primarily focuses on the consumption segment, with an emphasis on education, financial services, consumer and healthcare sectors, now manages assets of about $500 million, across its three investment vehicles.
The deal, which is likely to be the fourth transaction by Gaja Capital from its latest fund - the $240 million Gaja Capital III— marks a busy year for the Mumbai-headquartered private equity investor, three of whose portfolio companies have made their market debut over the last 12 months.
One such portfolio company, education services firm CL Educate, crossed the one-third mark on Monday, the first day of its initial public offering. The others that made strong market debuts include RBL and TeamLease, whose issues were oversubscribed by 70 and 66 times, respectively.
The persons cited earlier could not comment on how much stake Gaja Capital will hold in Kangaroo Kids if the deal materialises, or the valuation of the company after the transaction is closed.
Gopal Jain, managing partner at Gaja Capital, declined to comment on the matter.
A query on the transaction posted on the website of Kangaroo Kids remained unanswered till as of press time.
Kangaroo Kids, founded in 1993 by Lina Ashar, is one of the largest pre-kindergarten and K-12 school chains country. It has presence in Dubai, Maldives and Qatar too. Under its pre-school business, it claims to serve 9,000 students across 79 schools in 20 cities in India, Dubai and Maldives. It also has 16 K-12 schools under the 'Billabong High' banner.
"The concept (of Kangaroo Kids) is still a valid one. Early childhood education is picking up. I am glad they persisted and did not give up," said Narayanan Ramaswamy, partner and head of education, KPMG in India. "At a generic level, education is going to expand. It is going to see growth. (Investment needs) basic parameters- do they have growth, can they make money, is it sustainable. If yes, it sticks very well."
The investment in Kangaroo Kids is likely to be one of the largest in the education space after the unravelling of Subhash Chandra-backed Zee Learn's proposed merger with preschool chain Tree House Education and Accessories in December last year. At the time, Zee Learn, reportedly, cited multiple media reports about the sudden closure of Tree House' play schools, the latter's worsening financials and allegations of irregularities, as the reasons for calling it off.
For Gaja Capital, which has a strong investment focus on the broader education sector, the transaction is expected to be the first in the space, since it invested about Rs 65 crore in sports and fitness education venture SportzVillage in October 2015.
Apart from CL Educate and SportzVillage, the PE firm also counts education brand EuroKids and Team Lease Services in its portfolio.SportzVillage, the PE firm also counts education brand EuroKids and Team Lease Services in its portfolio.
From Gaja III, the investment firm has backed small finance bank licensee Suryoday Micro Finance, having invested Rs 30 crore in it in September last year. It is also an investor in frozen bakery and confectionery producer and supplier Bakers Circle.
Post the close of its third fund in March last year, Gaja Capital, which primarily focuses on the consumption segment, with an emphasis on education, financial services, consumer and healthcare sectors, now manages assets of about $500 million, across its three investment vehicles.
