B Investments enters higher education with EGP 560 mn EUE investment

Private equity firm B Investments is entering Egypt’s higher education sector by pouring EGP 560 mn into the European Universities in Egypt (EUE) hub, it said in a filing to the bourse (pdf). The transaction targets the Scientific Research Education And Development Corporation — which operates the EUE brand — through a mix of capital increase and a secondary sale. We are waiting for the transaction to close to know the exact shareholding percentage.

About the hub: EUE hub in the New Capital hosts branches of three British universities — the University of London, University of Central Lancashire, and University of East London.

The rationale: The firm — which has historically maintained a diversified portfolio across healthcare, F&B, payment, and pharma — sees an increasing “growing demand for quality education [in Egypt],” with EUE serving as a critical component hosting high-quality universities from the UK, B Investments’ Head of Investor Relations Omar Altmann tells EnterpriseAM. He pointed out that higher education is “an underserved market with attractive market dynamics.”

B Investments targets a massive demographic deficit. With university enrollments expected to hit 5 mn by 2030, Egypt will need 65 additional universities (or 1.3 mn new seats) to keep up with population growth, according to a report (pdf) by global investment management firm Colliers.

Education has proven highly lucrative, with EGX-listed education stocks recently trading at elevated 20-22x earnings multiples. B Investments joins rivals like Al Ahly CIRA — which is setting up four new international university models in the country — in the race for premium education assets.