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Tuesday, 24 November 2020

CI Capital to IPO education management arm Taaleem in 1Q2021

IPO WATCH- CI Capital is planning to list up to 40% of its education management arm Taaleem Consulting and Educational Services in an IPO in 1Q2021, Al Mal reports, citing sources with knowledge of the matter. The investment bank has already hired legal advisors for the listing and (very rightly) believes the market is ready for a new offering, the sources said. There was no mention of how much the IPO will be looking to raise. Taaleem reported a net profit of EGP 150 mn in its fiscal year that ended in August and expects this figure to grow by 40% next fiscal year, CEO Hazem Badran previously told the newspaper.

The listing could see Taaleem issue new shares, Badran said last year, and CI Capital did not plan to exit the company anytime soon, but hoped to give some shareholders the option to do so if the needed liquidity, Badran said at the time.

The Taaleem news is exciting, coming as it does just days after Banque du Caire signalled it was too soon to think about the timing of its long-awaited IPO. BdC was supposed to list 20-30% of its shares in April but put its plans on hold as the pandemic shook global markets. This year’s window was at least the second time BdC put the brakes on the transaction.

CI is right that the market is hungry for new names, and Taaleem seems to be a well-run business, so it’s going to boil down to a snap call on market sentiment as D-Day approaches for the offering. And 1Q could be good: Goldman likes how emerging markets smell in 2021 (as we noted above in What We’re Tracking Today). And both RenCap and Credit Suisse have said this week that the EGX is in line to have a good year in ‘21. Adding some shine: Egypt’s strong fundamentals and the fact that we’re trading at a big discount after underperforming regional markets (we’re down 22% YTD as of yesterday’s close).

Background: CI Capital and a group of co-investors — which included StonePine ACE Fund, a JV between StonePine Capital and ACE — acquired a 60% stake in Taaleem from Thebes Education Management Holdings in an EGP 1.2 bn transaction in 2019. Taaleem owns Nahda University in Beni Suef, the largest private university in Upper Egypt.

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