Global alternative investment firm KKR & Co. has acquired a majority stake in EuroKids International Pvt Ltd, one of the largest pre-school chains in India, from a consortium of investors led by mid-market private equity firm Gaja Capital.
EuroKids will continue to be managed by its management team led by co-founder and group CEO Prajodh Rajan, who will also remain a shareholder in the company, KKR said in a statement. It didn’t disclose financial details of the deal but said the investment has been made from its Asian Fund III.
The development comes three months after VCCircle first reported that KKR was in advanced talks to buy a controlling stake in EuroKids.
KKR said it will work closely with EuroKids and its portfolio of brands to identify both organic and inorganic growth opportunities and ways to enhance its offerings. The areas of focus include digital learning and tailored pedagogy.
In 2017, EuroKids acquired Kangaroo Kids and Billabong High franchise. The deals mark the US buyout fund's second India control deal this year.
In April, VCCircle reported that KKR will strike a similar control deal with India Grid Trust manager called Sterlite Investment Managers Ltd.
Ajay Candade, director at KKR, said the country has over 125 million children in the two-to-six age range, including the largest K-12 population in the world at 320 million people.
EuroKids is one of India’s largest education services providers in the Pre-School and K-12 segments. Its portfolio of brands includes EuroKids, EuroKids DayCare, Kangaroo Kids, EuroSchool and Billabong International, serves more than 120,000 students from 1,115 Pre-Schools and 35 K-12 schools across five countries. Its first Pre-School was launched in 2001.
“We are excited to build on our momentum and position our business for its next phase of growth alongside a firm of KKR’s caliber. We are thrilled to receive investment and support from KKR which shares our vision, ambition and passion for education,” Rajan said.
Gaja Capital, a private equity firm that focuses on mid-market deals, invested in the company in 2013. Swiss firm Partners Group is also an investor in the company.
Gopal Jain, managing partner at Gaja Capital, said the firm is extremely proud to have partnered with co-founders Prajodh Rajan and Vikas Phadnis, along with the entire management team since our investment in 2013 to support a period of tremendous growth and development for EuroKids.
EY-Parthenon, Cyril Amarchand Mangaldas, Barclays and Simpson Thacher & Bartlett served as advisors to KKR. Avendus Capital was the exclusive financial advisor to the company and the sellers, and Nishith Desai & Associates being the legal advisor to the company, and Pioneer Legal being the legal advisor to Gaja Capital.
KKR
KKR's former investments in the segment include Cognita Schools, a UK-based global private schools group, Weld North Education, a platform operator of digital and SaaS educational solutions, and Kindercare, a US-based operator of early-education and child care education facilities.
Among its other recent deals include an investment in Kerala-based hospital operator as the alternative assets giant further increases its exposure to India’s growing healthcare market.
Gaja Capital
Gaja Capital, which provides growth capital to mid-market companies, has also backed another educational institute CL Educate from its first fund. Gaja Capital first invested Rs 22.5 crore in CL Educate in 2007.
Its recent exit includes a stake sale in Mumbai-listed staffing services firm TeamLease Services Ltd in 2018.