Amanat takes a stake in UAE education provider Madaares

Amanat Holdings has acquired a minority stake in the UAE education provider Madaares, aiming to cash in on the booming sector.

The Dubai-listed firm paid Dh139.4 million for a 16 per cent stake in Madaares, making it a top-five shareholder in the company.

“The macroeconomic and socio-demographic environment for K-12 education sector continues to be favourable and we look forward to working alongside the Madaares shareholders to drive growth and deliver value for all stakeholders,” said Faisal Bin Juma Belhoul, the chairman of the board of Amanat.

Madaares operates four nurseries and six schools in the UAE offering British, American and International Baccalaureate curricula with a combined headcount of 6,900 students.

“The private K-12 education sector in the UAE is expected to grow annually by 9 per cent through to 2020,” said Khaldoun Haj Hasan, the chief executive of Amanat.

Rising education costs were one of the major factors that led to a rise of inflation during the first quarter in Dubai. Overall, inflation rose 1.6 per cent in the first quarter compared to the same period last year, according to the Dubai Statistics Centre.

The education sector reported the highest increase of 4.8 per cent year-on-year in the first quarter.

The current supply of education facilities falls short of the demand from the growing population, according to a Colliers International report from last year.

There are also high returns on private education investments.

“High quality, efficient international schools could achieve 15 to 20 per cent net profit margins after initial stabilisation years,” the report said.

Dubai had 173 private schools in the 2015-2016 academic session, catering to 265,299 students, according to the Knowledge and Human Development Authority (KHDA).

The number of seats in the private schools in Dubai is expected to increase to 315,500 next year, and to 360,000 by 2020, according to KHDA strategy.

Shuaa Capital advised Amanat Holdings on the acquisition.

Madaares is the parent company of the educational investment fund Taaleem, which Madaares acquired in 2007 along with Beacon Education that manages the schools. Taaleem runs schools such as Dubai British School and Uptown School.

National Bonds Corporation launched Madaares in 2006 with Dh500 million, according to media reports.

Amanat, which also invests in the health care sector, last month reported a net profit of Dh50.6m on earnings from Al Noor Hospitals Group shares. The earnings are from the time of its listing in November 2014 until the end of last year.

The company also invested 200 million Saudi riyals (Dh195.9m) for a 35 per cent stake in the Saudi health care company Sukoon International in August. It paid Dh250m for a 4 per cent stake in Al Noor Hospitals in May.

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