October 1, 2015

Emerging market private equity firm, The Abraaj group said it signed a partnership deal with Tiba Group, one of Egypt’s private school providers of grade school to university-level education, through its second generation North Africa fund.

Established in 1990 by Dr. Seddik Afifi to serve students from kindergarten through grade 12, Tiba group has grown from one academic school to now include an integrated educational system that operates across seven educational institutions in Egypt, from kindergarten to university-level education, serving approximately 20,000 students.

Tiba currently operates three K-12 schools, three academies, and one university, offering national as well as American and British education curricula to both domestic and international students in courses such as engineering, computer science, information technology, business management and financial market.

Driven by emerging middle class and aspiring parents with keen interests for quality education for their children, the education sector in Egypt is experiencing rising demand.

Dr. Afifi, founder of Tiba Group said the partnership will help the education institution realizes “its vision for excellence in education and meet this demand.”

“Affordable, accessible and high quality education should be the right of every child as it is the single greatest catalyst to growth and holistic development,” said Dr. Afifi. “We are confident that [Abraaj] their sector experience, global platform and unique operating skills will enhance our offerings and able us to offer a greater value proposition to our students.”

Mohamed El Rashidi, Incoming Chief Executive Officer of the newly formed education management company, added that it is “an opportune time to develop the education sector in Egypt. With enrollment rates steady increasing year-on-year in all verticals across the sector, the opportunity to enhance the quality of education, and ultimately cultivating the necessary skills forEgyptian jobs and careers is immerse.”

The Thebes Schools have locations in Cairo and Giza. The university, Nahda University, was founded in 2007 and currently enrolls approximately 4000 students.

Abraaj and Tiba’s management team say they will focus on improving the curricula, boosting the brand to increase enrollment, upgrade the facilities and expand partnerships with potential employers to increase job placements for its University and Academy students.

Commenting on the investment, Ahmed Badreldin, Abraaj Group Partner and Regional Head of Middle East and North Africa said the firm’s collaboration with Dr. Seddik Afifi “represents a unique partnership with Egypt’s leading education group who share our vision of providing high quality, relevant and accessible education to a growing student body in Egypt.”

The group also announced the formation of an education management company that will provide management support services to educational institutions.

The partnership marks Abraaj’s seventh investment by its Abraaj North Africa Fund II; the second investment in education in Egypt and the fifth globally. In 2014, Abraaj invested in CIRA, Egypt’s largest K-12 private schools group.

North Africa has the highest income level on the continent with a middle class that is expected to double its total consumption between 2014 and 2024, leading to the creation of further investment opportunities across diverse sectors.

Egypt, the most populous nation in the North Africa and Middle East region, is home to a population of 87 million.

Earlier this year, the firm made its inaugural ANAF II investment in the region in North Africa Hospital Holding Group, a healthcare system with assets in Egypt, Morocco and Tunisia.

To date, ANAF II has made six investments across its target markets in the education, healthcare and industrial sector as part of the firm’s overall investment strategy for Africa.

In late August, Abraaj announced it closed a $375 million funding from global institutional investors, pension funds, sovereign wealth funds and development finance institutions for its ANAF II, which will be directed toward well-managed, mid-market businesses in Algeria, Egypt, Morocco, and Tunisia in sectors such as education, consumer goods and services, business services, logistics, industrial materials and healthcare.

Sixty-three percent of the capital committed to the fund came from European and North American investors with institutional investors, pension funds and development finance institutions accounting for 86 percent of the committed capital, the private equity firm said.

The firm said the ANAF II will follows the investment strategy of its predecessor, the Abraaj North Africa Fund I, and will target both majority and significant minority stakes in businesses that allow the group to influence the strategic direction and growth agenda of its investee companies.

Since its first investment in the North Africa region in 2006, Abraaj has helped pioneer the development of the private equity industry with 23 investments across eight sectors as well as 11 full and partial exits, including the North Africa Hospital Holdings Group, technology solutions provider OMS and education group CIRA, operating through its dedicated local team of 14 investment professionals located in four offices across the region in Morocco, Algeria, Egypt and Tunisia.

Abraaj began operation in Africa more than a decade ago and has found success in strategy that combines solid research, expert local staff and a focus on successful companies-regardless of where they operate. This emphasis on companies rather than countries has led Abraaj to places where others fear to tread, including the once war-torn Ivory Coast, helping to spur economic growth and development of the PE industry on the continent with $3 billion in committed and deployed capital across the continent.

Finding good local companies is job one for the regional offices and fortunately, the firm has been able to get very talented people with a combination of professional skills and intimate knowledge of the local markets that allows the firm to find the well-run companies and good deals that other foreign investors miss.

So far in 2015, the firm has raised $1.37 billion for the African continent, including the $990 million raised in April for its third sub Saharan Africa Fund.

Commenting on the recent fund closing, Arif Naqvi, founder and Chief Executive of The Abraaj group, said the successful closing of the firm’s second generation North Africa Fund “demonstrates the continued optimism and belief of investors in the economic growth and development of this dynamic region.”

“[By] leveraging our deep local knowledge, global underwriting standards and successful track record, the firm is well positioned to identify and partner with high growth businesses that we can develop into regional champions. We look forward to investing this Fund successfully and thank our investors for the confidence they have shown in Abraaj,” he said.


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