Apollo makes US$ 1.53 billion offer for Unip
Valor Econômico - 06/19/2008
Businessman João Carlos Di Gênio, owner of Brazil's largest educational group, has received an offer from the Americans of Apollo to sell them Objetivo group's entire part of higher education, formed by Unip and 46 other colleges. The proposal evaluates Unip at R$ 2.5 billion (US$ 1.53 billion). Based in Arizona, Apollo - which entered into a partnership with American fund Carlyle to make investments outside the USA - surveyed more than 15 educational institutions in Brazil in the last months, among them Universidade Estácio de Sá (Estácio de Sá University), which chose to go public and now has GP Investmentos in its capital. In the proposal for Unip's purchase, it is assisted by the Morgan Stanley investment bank. According to Valor, Apollo's offer is still preliminary and it was what was left after a process of survey of interested parties, made by the Merrill Lynch investment bank, contracted by Di Genius. Even though at a first sight it seems high, the value of the operation has not excited the businessman, who for years has been saying he doesn't need money anymore. The figure is equivalent to nearly R$ 13,020 (US$ 8 thousand) per student at higher education of the Objetivo group (192 thousand students, including Unip and other colleges controlled by Di Genius, according to data of the Hoper consulting company). The Estácio's market value per student enrolled in the institution is R$ 10.8 thousand (US$ 6.63 thousand) and per student enrolled at Anhangüera, R$ 30.6 thousand (US$ 18.8 thousand). Unlike the two other institutions, Unip does not have stocks traded in stock market. Another difficulty is the fact that Di Genius would be against the sale of 100% of the operation. The education sector goes through an intense process of consolidation that began when Anhangüera went public, in March 2007. Last year there were 25 acquisitions in the sector. This year, so far, there were 22 businesses dealings. Large groups try to become larger with the acquisitions, diluting fixed costs and offering cheaper monthly fees, to attract the classes with lower purchasing power.