Target: Laureate Education Inc.
Price: $3.8 billion
Sponsors: In order of size: Kohlberg Kravis Roberts & Co., Citigroup Private Equity, S.A.C. Capital Management LLC, SPG Partners, Bregal Investments, Caisse de depot et placement du Quebec, Sterling Capital, Makena Capital, Torreal S.A. and Southern Cross Capital
Financial Advisor: Buyers: Citigroup and Goldman Sachs
Legal Counsel: Buyers: Simpson Thacher & Bartlett LLP and Katten Muchin Rosenman LLP
Hedge funds and LBO firms appear to have tripped over one another to get a piece of Laureate Education Inc.
Led by the company’s chief executive, Gordon “Jeff” Becker, a consortium of 10 firms has agreed to pay an enterprise value of $3.8 billion, $60.50 per share, to take Laureate Education private. As of Sept. 30, 2006, Laureate Education had outstanding debt of $463.9 million. The Baltimore-based company operates campus-based and online universities in Latin America, Europe and Asia.
The consortium is led by
It may well be the largest-ever team of buyout firms to combine for an equity stake in an LBO, though a few of the players will likely take passive roles. Citigroup Private Equity is habitually a passive co-investor, as is Caisse de depot et placement du Quebec. Two hedge funds in the consortium, Makena and S.A.C. Capital, the secretive hedge fund run by Steven A. Cohen, aren’t known for taking part in LBOS.
Each of the firms involved in the Laureate Education deal declined to comment, except for the Caisse de depot et placement du Quebec. The pension “only has a small part in that deal. It is not a major partner in the consortium,” said a spokeswoman.
Becker approached the board about a sale in September of last year. He made three offers before a special committee of Laureate Education’s board accepted his fourth of $60.50 per share, according to a press release put out by the company.
Citigroup and Goldman Sachs served as financial advisors to buyers of Laureate Education. Simpson Thacher & Bartlett LLP and Katten Muchin Rosenman LLP provided them legal counsel.
Laureate Education announced its buyout one day before a second Baltimore education company, Educate Inc., announced it had agreed to sell to an LBO group containing some of the same members:
Other education deals in 2006 include