EQT to acquire Spain's Universidad Europea for over 2 billion euros

By Andres Gonzalez and Pablo Mayo Cerqueiro

LONDON (Reuters) -EQT has agreed to acquire a majority stake in Spain's Universidad Europea from private equity firm Permira, in a deal that sources said valued the higher education group at more than 2 billion euros ($2.2 billion) including debt.

The buyout groups announced the deal on Monday, confirming an earlier Reuters report. It will see Permira retain a minority holding in the business.

The deal represents EQT's first-ever investment in education made through its infrastructure arm.

"We look at education as an emerging infrastructure investment theme," Anna Sundell, a partner within EQT's Value-Add Infrastructure Advisory team, said in an interview.

The deal comes as buyout groups prepare to sell stakes in companies after two years of muted activity, taking advantage of improving market conditions and with pressure mounting to return capital to their funders.

It follows the sale last month of Permira-backed fund administrator Alter Domus at an valuation of 4.9 billion euros.

"In companies that are high-quality assets and where there are still value creation initiatives to be crystallised, we sell a majority stake to the right partner, but we remain significantly invested as minority shareholder," said Pedro Lopez, partner and head of Madrid at Permira.

Permira invested in Universidad Europea in 2019 to fund the university group's expansion as part of growing investor interest in education groups in Spain and Portugal.

It is expected to generate returns of close to five times its initial investment through the stake sale, a source close to the transaction said.

For its part, EQT said it aims to improve Universidad Europea's online offering and draw upon its international expertise to support the university in establishing campuses in new regions.

The proportion of private university centres in Spain has increased to 42% over the past five years, up from 36%, according to the Spanish Ministry of Universities.

The Spanish and Portuguese private higher education markets are poised to grow over coming years, driven by demographic trends as well as demand from international students in Europe and Latin America who view Spain as an attractive destination to pursue higher education, said EQT in a statement.

The number of students in private universities in Spain reached 278,294 in 2023, 20.5% of all university students.

EQT was advised by Deutsche Bank and Allen & Overy, while Permira was advised by Rothschild and Linklaters.

($1 = 0.9232 euros)

(Reporting by Andres Gonzalez; editing by Jason Neely and Emelia Sithole-Matarise)