ICG buys Singapore’s PSB Academy from Baring Asia

A new wave of investment pours into Asian education services as the region's rising middle class looks to spend more on its children's future.

Intermediate Capital Group (ICG) has acquired 100% of PSB Academy (PSB) from Baring Private Equity Asia, part of a new wave of investment in the education sector.

The move sees a relatively new player in Asia's fast-growing education sector take over from a relatively early private equity investor in an industry that is seen as having huge potential, given the rise of the middle class across the region.

Baring Asia has made about 2.5 times the money it invested in PSB, according to a person familiar with the deal and overall it has made a healthy return on the capital it has deployed in the sector. 

PSB is one of the largest independent tertiary education institutions in Singapore, with a 54-year track record. It's growth in recent years has been driven by expansion of courses and across the region. It operates two campuses in Singapore as well as schools in Vietnam, Myanmar, and Indonesia.

“PSB has invested in infrastructure, advanced pedagogy, and deep partnerships with universities and industry. As a result, PSB continues to attract a growing and diverse group of local and international students,” said Derrick Chang, CEO of PSB Academy.

Baring Asia, led by Jean Eric Salata, together with Canada Pension Plan Investment Board took Nord Anglia Education private on September 1 for $4.3 billion, after first investing in the Hong Kong-headquartered company back in 2008. Baring Asia executed at least one dividend recap during its ownersip of Nord Anglia.

The regional private equity firm has also invested in EduCo Investment in 2010 and Saint George’s University in 2014. It was also an investor in Chinese firms Noah Education and Minsheng Education.

To be sure, Baring Asia has also taken some knocks in the sector. It invested in New York-stock exchange listed Ambow Education before a court order it into liquidation in 2013. It was also sued by its portfolio company Global Indian Schools in 2014. But these were rather small investments compared to the overall quantum of capital that the firm has invested in education. 

Baring Asia bought PSB Academy from German testing and certification company TÜV SÜD in 2011 for an undisclosed amount.

ICG is a relative newcomer to the sector in Asia education. It made its first investment in South Korea’s Time Education in June 2015.

Time Education is the largest private kindergarten to high school tutoring company in Korea in terms of scale, comprising 84 tutoring centres. Time has a monthly average of more than 26,000 students, over 200 franchisees, and a complementary education content business. ICG invested part of its third Asia fund in Time Education to refinance and offer some growth capital. ICG underwrote the entire capital structure from senior mezzanine to ordinary equity.

ICG plans to use PSB as platform for additional acquisitions in education, according to Christopher Heine, head of equity and mezzanine across Asia Pacific at ICG.

ICG’s Asia Fund III invests in mid-market businesses in the Asia Pacific economies of Japan, South Korea, Hong Kong, SE Asia, Australia and New Zealand.

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