Deal Maker of the Year Awards 2012 WINNER - KUWAIT
DEAL: United Education Company acquires an 82.2% equity interest in Al Rayan Holding Company
COMPANY: KAMCO - KIPCO Asset Management Company TEL: 00965 185 26 26 EMAIL:
info@kamconline.com WEBSITE:
www.kamconline.com TWITTER: @kamcotweets
DEAL OVERVIEW: Q
Please summarise the transaction?
United Education Company (UEC) acquired an 82% equity interest in Al Rayan Holding from a consortium of sellers led by Global Capital Management, Global Investment House's alternative asset management group. Al Rayan Holding was established in 2006 by Global Capital Management with the aim of consolidating K-12 schools in Kuwait into a single platform. Al Rayan has over the years successfully grown into Kuwait's largest K-12 education company operating six schools with over 10,500 students, including the leading Indian and Pakistani schools across the country.
Q
What was your role within the transaction?
KAMCO – (KIPCO Asset Management Company) acted as the Buy-side financial adviser to United Education Company for the transaction. KAMCO was responsible for managing the entire transaction from initiation to negotiations and execution along with advising on financing options. In addition, as the buy- side financial advisor, KAMCO was also responsible for managing the third party advisors such as auditors and legal advisors in relation to the due diligence exercises.
Q
What were the challenges or difficulties presented?
KAMCO screened and analysed more than 50 targets before finalizing a select number of suitable opportunities that included Al Rayan. Considering that the education sector is a highly regulated sector in
Kuwait, it was important for KAMCO to obtain a deep understanding of the business platform, legal structure of the organization, and compliance with the acquirer’s parameters and key performance indicators and ensure that the consolidated financials are in accordance with international accounting standards. In addition, due to strong entry barriers in the Kuwait K-12 education sector, acquiring the education institution at the right valuation is a major challenge.
Q
How were the challenges or difficulties overcome?
KAMCO along with external advisors conducted a detailed due diligence of the Al Rayan and the related schools. Various queries were raised during the due diligence process. Each of the queries and concerns were discussed with its top management through a series of meetings. The deal was executed at a mutually agreed upon valuation after successful completion of the legal and financial due diligence. KAMCO, on behalf of UEC, conducted various meetings with the sellers to negotiate the right valuations for the deal.
Q
What other types of clients or transactions have you been involved with?
KAMCO as a part of its investment banking platform, provides value added services related to mergers & acquisitions, restructuring, and fundraising through debt and equity instruments. Our clients include government and quasi-government institutions, private companies, family
businesses, and banks, among others. KAMCO has concluded more than 70 major transactions that were worth more than US$10 billion over the past 7-10 years.
KAMCO has
concluded more than 70 major
transactions that
were worth more than US$10 billion over the past 7-10 years.
Q
What are your thoughts and predictions for 2013 and beyond?
KAMCO had closed numerous investment banking transactions in 2012 including mergers and acquisitions, restructurings and bond issuances. For 2013, we are focusing on several operations related to sell-side advisory, restructuring and debt raising. In addition, we are discussing with a number of clients for potential investment banking deals. Our expectations for 2013 are positive for advisory and debt capital market undertakings with an ongoing improvement on equity capital market transactions.
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