Social Impact Capital (SIC) will soon have increased its stake to from 51.2% to 88.7% in CIRA Education. The extra 37.5% stake will officially change hands once the MTO is settled, the Public Investment Fund-backed vehicle confirmed in a statement (pdf)

The EGP 3.4 bn transaction is being funded by a recent capital increase by SIC — the vehicle through which the founding El Kalla family holds its stake in the nation’s leading private-sector education company — which was subscribed to by the Public Investment Fund-owned Afaq Al Elm Investments Company with the agreement that the proceeds would go towards acquiring up to 100% of CIRA Education. Afaq Al Elm’s parent company, the Saudi Egyptian Investment Company (SEIC), is a wholly owned Public Investment Fund subsidiary set up in 2022 to invest in Egypt and its holdings here include sizable stakes in Mopco, Abu Qir Fertilizers, E-finance, and Alexandria Container and Cargo Handling.

Just over 96% of shares responded to Social Impact Capital, with soon-to-be previous shareholders agreeing to sell their stakes — in total amounting to 218.4 mn shares — for EGP 15.5 a share in a mandatory tender offer.

Contrary to SIC’s original plan, CIRA Education will remain on the EGX, with an amendment earlier this month by CIRA Education cancelling a clause that stipulates the voluntary delisting of CIRA’s shares within two years of the acquisition’s execution, This meant that the company subsequently lowered its purchase offer to buy up to an additional 38.78% of CIRA’s shares — approximately 226 mn shares by our math — in a move that would bring its holding in the company to up to around the 90% mark.

Further expanding outside Egypt seems to be the plan going forward, with yesterday’s statement reaffirming how the move is positioning the education services provider for regional expansion. “The collaboration will allow CIRA to forge pioneering partnerships with both local and global institutions to meet the region’s evolving educational needs,” the statement said.

What they said: “This transaction represents a bold leap toward realizing our ambition of reshaping education across the region, marking a pivotal milestone in CIRA’s journey. With the partnership of SIC and SEIC, we are poised to take our vision to the next level — supporting its aspiration to become a regional leader. This partnership reflects our shared goal to contribute to the future of education and empower the next generation. Together, we will continue to innovate, expand and deliver world-class education to students across the region,” said CIRA Education CEO Mohammed El Kalla.

Remember, the transaction was nearly two years in the making, a source with first-hand knowledge of events told us last year, but it took the float of the EGP this spring and CIRA’s clear ambition to become a regional player in education to bring it home. PIF is known to be exceptionally rigorous in its investment decision making process, employing top advisors to make certain that it invests only in companies with clear growth prospects that fit the fund’s mandate to grow Saudi and regional champions.

Advisors: Rothschild & Co is advising PIF, with Allen & Overy and our friends at Matouk Bassiouny doing legal duties. Our friends at EFG Hermes are advising El Kalla family, while White & Case is legal counsel.

Market reax: CIRA Education shares rose 6.8% to trade at EGP 16.51 by the end of trading yesterday on the first day back after Thursday’s deadline for shareholders to respond to the offer.

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