Providence buys Australia's Study Group

SYDNEY: US buyout firm Providence Equity Partners has acquired university programme provider Study Group from Australia's CHAMP Private Equity for $570 million in the country's first sizeable PE deal since the global financial crisis.

CHAMP planned to float Study Group earlier this year but joined a growing list of private equity firms eyeing a trade sale instead following a poor run for recent stockmarket listings in Australia. Bankers expect such deals to increase as buyout firms are under pressure to deploy capital. However secondary buyouts, or private equity firms buying assets from each other, are not yet common in Australia.

Private equity groups are also loooking to sell Australian pallet maker Loscam and sports goods retailer Rebel Sports. Providence would acquire the shares in Study Group owned by CHAMP and Petersen Investments for A$660 million, the company said on Wednesday. This was higher than the expected range of A$500 million to A$600 million. Study Group helps prepare students for university study in the United Kingdom, Australia and the United States, where it owns the Center for English Studies chain of language schools.

CHAMP bought the group from the Daily Mail Group in 2006 for A$176 million. Providence was the frontrunner in the sale process after rival bidders including Kaplan Professional, Bain Capital and Apollo Global dropped out of the race. Study Group helps prepare students for university study in the United Kingdom, Australia and the United States, where it owns the Center for English Studies chain of language schools.

Goldman Sachs served as financial advisor to Providence. Credit Suisse and Deutsche Bank were joint financial advisors for Study Group. Following a two-year slump during the global financial crisis, when divestments were near impossible, private equity sales are back on the agenda as stock market valuations improve, enabling listed rivals to make bids, and as bank financing re-opens. Two private equity consortiums are currently looking at bidding for Australia's Healthscope, the first big potential leveraged buyout in Australia since the global financial crisis.