EF Education First Shortlists Bidders for Chinese Unit
Private equity firms Hillhouse Capital and Warburg Pincus LLC are among suitors that have been invited to make second-round bids for EF Education First Inc.’s Chinese business, according to people familiar with the matter.
Permira Holdings LLP was also asked to submit second-round bids that are due later this month, said the people, who asked not to be identified as the information is private. Education First now has a shortlist of about six bidders for the sale, which could fetch $1.5 billion to $2 billion, the people said.
Education companies are benefiting from Chinese parents who see fluency in foreign languages and academic excellence as an edge in the increasingly competitive job market. The nation’s online education market reached 252 billion yuan ($36 billion) in revenue in 2018 and is projected to grow at least 16% annually in the next three to five years, according to iResearch Consulting Group.
EF Education First, founded by Swedish billionaire Bertil Hult in 1965, provides both classroom-based and online English language training to kids and adults across Asia and Europe, its website shows. The Lucerne, Switzerland-based company also offers educational tours and cultural exchange programs. It’s one of the largest English-language training providers in China, with over 300 schools across 60 cities including Beijing, Shanghai and Shenzhen.
Deliberations are ongoing and the private equity firms could still decide against bidding for the asset, the people said. A representative for EF Education First said they do not comment on market speculation, while representatives for Permira and Warburg Pincus declined to comment. A representative for Hillhouse didn’t immediately respond to requests for comment.