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Blackstone picks up 37.5% stake in Aakash Educational

"The deal values AESL at USD 500 million and Blackstone has paid Rs 1,350 crore for the 37.5 per cent stake," a source said.

Oct 30, 2019, 09.20 PM IST
New Delhi: Private equity firm Blackstone has picked up 37.5 per cent stake in competitive examination preparation firm Aakash Educational Services Ltd for Rs 1,350 crore valuing the institution at USD 500 million (over Rs 3,545 crore), according to sources.

Blackstone, which last week received approval from the Competition Commission of India (CCI) for picking up 51 per cent stake in Aakash Educational Services Ltd (AESL), is keeping options open to hike stake in the institute.

In a statement, the two companies said their partnership will help in building AESL as India's largest digitally enabled, omni-channel education company.

"The deal values AESL at USD 500 million and Blackstone has paid Rs 1,350 crore for the 37.5 per cent stake," a source said.

Considering the fact that the PE (private equity) firm received CCI approval for 51 per cent stake last week, it still has headroom to increase stake in AESL, the source added.

However, picking up of any additional stake will depend on how AESL performs going forward and also on how the market shapes up, the source added.

As part of the deal, which was completed on Wednesday, Blackstone will have two directors on the board of AESL.

"AESL has seen significant growth in the last decade, becoming one of the largest education companies in the country. By leveraging Blackstone's global reach and expertise, this partnership will aid our push into newer areas and cutting-edge education technology, enabling us to deliver long-term value to our students, employees, investors and other stakeholders," AESL Chairman and Managing Director J C Chaudhry said in the statement.

Blackstone Head of India Private Equity Amit Dixit said the firm is investing in AESL since it is the most scaled up test preparation business in India with a professional management team and best-in-class corporate governance.

Live tutoring, whether in physical or online classrooms, has proven to be an effective model globally for delivering consistent results in standardised tests. AESL has been a leader in this model in India, delivering exceptional results in NEET and JEE examinations year after year, he added.

"Our thesis is to accelerate AESL's push in online live tutoring, both organically and through acquisitions. We are excited to partner with Aakash and his management team to deliver on this vision," Dixit said.

AESL is a leading medical entrance test preparation provider with a network of more than 200 centres across 130 cities, teaching more than 2.5 lakh students with growing digital presence.

Blackstone Managing Director Amit Jain said, "We plan to supplement this strong physical network by growing AESL's digital segment to create India's largest omni-channel test preparation company."

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