The Hong Kong-based investment fund HPEF Capital Partners and other shareholders are seeking to sell their ownership of the education company ILA Vietnam for $150 million. - Photo gooverseas.com
The Hong Kong-based investment fund HPEF Capital Partners and other shareholders are seeking to sell their ownership of the education company ILA Vietnam, Bloomberg reported early this week.
HPEF Capital Partners, with a 60 per cent stake in ILA Vietnam, and other shareholders are seeking at least US$150 million from the sale.
The sale is expected to draw attention from both international equity firms and education firms. The first-round bids could be due by the end of this year.
ILA Vietnam declined to comment.
According to local newspaper Nhip Cau Dau Tu, the $150 million deal is 15 times the Viet Nam-based English training establishment’s earnings before interests, taxes, depreciation and amortisation.
The consultancy company for this deal could be the Singapore-based Rippledot Capital Advisers.
The rate is much comparatively higher than that of all merger and acquisition (M&A) activities happening in 2016 and equivalent to that of M&A activities in the United States.
HPEF Capital Partners used to be the private equity unit of the British financial and banking services company HSBC. The Hong Kong-based fund split from HSBC in 2010 with the name Headland Capital Partners.
Headland Capital Partners bought 60 per cent of ILA’s stake from the founders in 2013, and the value of the deal has remained unknown.
ILA Vietnam, which was founded in 2001, is running 31 English training centres in six big cities of Viet Nam and employing more than 400 foreign teachers. The company has admitted about 165,000 learners so far.
According to Dezan Shira & Associates, Viet Nam is an attractive market for foreign investment in the education sector with 42.1 per cent of the population being under the age of 24.
In 2015, nearly 110,000 Vietnamese students enrolled in other countries, costing total $3 billion. In the country, total value of foreign direct investment (FDI) was also $3 billion by November 2015.
Private equity funds have also invested in Viet Nam’s education sector. In 2004, International Finance Corporation – a member of the World Bank – invested $7.25 million in the Australian-owned RMIT University. In 2010, the HCM City-based Mekong Capital invested $6 million in the Vietnam-Australia International School. — VNS