Private equity firm Oakley Capital plans to find a minority investor for German university group IU Group, EducationInvestor Global can reveal.

This publication has learnt that the firm intends to sell a stake in the company by the end of this year to a partner willing to support the further growth of the business.

Rumors of a possible exit or partial sale of the business had started to circulate in 2020 but ceased with the spread of the pandemic.

Oakley is likely to remain invested in the business by retaining a significant stake and possibly transferring its ownership from Fund III to a continuation vehicle, according to a source close to the process.

“This is a strong asset that has significantly grown since 2017 and continues to have high-growth potential. A minority sale can be a way to validate the success that the company has had with Oakley, while further boosting its growth and expansion with the addition of fresh capital and the support of a new partner,” our source said.

IU Group – formerly known as Career Partner Group – counts 85,000 students enrolled across four types of programmes taught in German and English: online degree courses, part-time studies, dual studies (private on-site education in cooperation with corporate partners) and on-campus studies in 28 German cities.

Founded in 2000 as a digitally native business, IU Group has benefited from the growing appetite for online education and achieved student intake growth of 98% in 2020, according to the company’s website.

“There are numerous players eager to enter this market through a promising deal like IU Group, even just as minority investors. Potential bidders include several private equity firms that might want to invest in the education space or strengthen an asset by expanding into a different geography such as Germany to leverage their cross-border exposure,” a second source told this publication.

Oakley acquired a 79% stake in the company in November 2017, in a carve-out from US-based higher education provider Apollo Education Group.

The transaction was partly funded by a unitranche facility provided by BlueBay, while Oakley invested €85 million via its third fund, an €800 million vehicle raised in 2017. The firm is currently investing its fourth vehicle, which closed on €1.46 billion in July 2019, above its €1.2 billion target.

Oakley Capital declined to comment.

Date published: 28 April 2022

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