Increased demand for private education has attracted more players, including Nova Pioneer and Sabis International School, which is partly owned by Centum Investments.
One of the latest private school brands to open its doors is Crawford International, based in Kiambu’s Tatu City and which is charging annual fees of Sh950,000 for senior high school.
Private equity firm Fanisi Capital has signed an agreement to sell Hillcrest International Schools to Dubai-based GEMS Education for Sh2.6 billion, marking the latest deal in the high-end private education industry.
Fanisi teamed up with businessman Anthony Wahome to buy Hillcrest out of bankruptcy in 2011, paying Barclays Bank of Kenya, the family of Kenneth Matiba and other creditors a total of Sh1.8 billion.
This indicates that the PE firm and Mr Wahome are set to book a profit of at least Sh800 million from their seven-year investment.
Fanisi owns a 55 per cent stake in the school, with the balance 45 per cent held by Mr Wahome, who also owns the Nairobi-based Rose of Sharon Academy.
“Hillcrest is being sold to GEMS for Sh2.6 billion. The transaction is awaiting approval of regulators,” a source familiar with the transaction told the Business Daily.
The deal comes after a consortium led by PE firm AfricInvest sold Brookhouse School to UK-based PE fund Educas for Sh3.6 billion in 2015, making it one of the biggest transactions in Kenya’s high-end education sector.
The buyout of Hillcrest will help the Dubai chain of schools to expand in the Kenyan market, adding to its Nairobi-based GEMS Cambridge International School.
The multinational, GEMS Education is owned by a consortium of institutional investors, including Varkey Group and American private equity giant Blackstone Group.
GEMS, which offers primary and high school (K-12) education in the US, Europe, Africa, China and the Middle East, will inherit Hillcrest’s student population of about 1,000.
Hillcrest offers the British curriculum, International General Certificate of Secondary Education (IGCSE) and charges annual fees of up to Sh1 million depending on the year of study and whether the learner is on full board.
GEMS Cambridge International School also runs a similar curriculum and charges annual fees of up to Sh2.3 million.
Hillcrest, which sits on 36.7 acres in Karen, Nairobi, first made a net profit of Sh320 million in 2015 under the ownership of Fanisi and Mr Wahome.
Its acquisition will enable GEMS to expand its market share in the industry where its main competitors include Braeburn, Kenton, Peponi, Banda and Montessori.
Private schools are reaping big from increased spending on education by Kenya’s wealthy and middle class families, with at least 25 institutions having annual revenue of between Sh350 million and Sh1 billion.