IPO Report: Nord Anglia Education (NORD)

Francis Gaskins |

Nord Anglia Education (NORD) is international operator of premium schools headquartered in Hong Kong.

Ten other companies are scheduled for the week of March 24, 2014.  The full IPO calendar is available at IPOpremium.

The manager and joint managers are Credit Suisse, Goldman Sachs, J.P. Morgan.  The co-managers are Barclays, Deutsche Bank, RBC Capital Markets, BMO Capital Markets, HSBC Corporation, William Blair.  SEC filings

NORDscheduled a $304 million IPO with a market capitalization of $1.5 billion at a price range midpoint of $16 for Wednesday, March 26, 2014 on the NYSE.

NORD believes it is the world’s leading international operator of premium schools.

NORD lost money each of the last three fiscal years (August fiscal) and in 2013 and 2012 did make money in the November quarter, which looks like a seasonal  event.

Much of NORD’s student and capacity expansion came from acquisitions.  The very negative price-to-tangible book value of -3.44 (compared to the price-to-book value of 5.7) indicates that acquired companies were acquired at a premium to hard book value.

IPO proceeds are to repay debt


Valuation Ratios


Price /

Price /

Price /

Price /

% offered

Annualizing Nov qtr

Cap (mm)





in IPO

Nord Anglia Education (NORD)














The rating on NORD is positive.  This market likes players who are big in their sectors.

NORD believes it is the world’s leading international operator of premium schools.

As of March 9, 2014, NORD had over 17,000 students, and in fiscal 2013 its average revenue per student was $26,600.

NORD teaches children from kindergarten through the end of secondary school, at its 27 premium schools in China, Europe, ME/SEA and North America. NORD  primarily operates in geographic markets with high FDI, large expatriate populations and rising disposable incomes. NORD’s student enrollment increased at a CAGR of 29% from the end of fiscal 2008 to the end of fiscal 2013.

NORD has grown its business significantly since the 2008 financial crisis despite a challenging global economic climate.

NORD increased its student capacity and enrollments from 5,393 places and 4,010 students as of August 31, 2008 to 21,737 places and 17,161 students as of March 9, 2014.

During that period, NORD expanded capacity at its existing schools by 1,980 places, developed two greenfield schools with a total of 3,000 places and acquired 19 schools with a total of 11,364 places.

Revenue increased and losses continued
NORD’s revenue increased by 21.9% from $225.2 million in fiscal 2011 to $274.4 million in fiscal 2012 and by 17.9% to $323.7 million in fiscal 2013.

NORD recorded losses of $48.1 million in fiscal 2011; $37.4 million in fiscal 2012; and $23.3 million in fiscal 2013. NORD generated Adjusted EBITDA of $47.9 million, $70.2 million and $79.5 million in fiscal 2011, 2012 and 2013, respectively.

Dividend Policy
No dividends are planned.

Intellectual Property
NORD has applied for or registered trademarks relating primarily to its logos and names, including “Nord Anglia,” “British Schools of America,” and “British American School” in various jurisdictions.

NORD does not own the rights to the name “The British International School” in any jurisdiction, and any organization that meets certain accreditation requirements can use this name.

The local market for premium schools in each of the cities where NORD operates is highly fragmented and competitive.

All of NORD’s schools face competition from other private premium schools, including schools that use the English National Curriculum and schools that use curricula based on other educational traditions. NORD also competes with other school operators for acquisition opportunities.

5% stockholders
Premier Education Holdings Ltd, 93.3%

The Baring Asia Private Equity Fund III (“Fund III”) and The Baring Asia Private Equity Fund IV (“Fund IV”) and certain affiliates hold approximately 96% of the shares in Premier Education Holdings.

Use of proceeds
NORD expects to net $278 million from its IPO. Proceeds are allocated as follows:

$189.6 million to redeem $171.5 million of its 10.25% senior secured notes due 2017 at a redemption price of 110.25%, including accrued interest of $0.5 million;

$57.7 million to redeem $52.5 million of its 8.50%/9.50% senior PIK toggle notes due 2018 at a redemption price of 108.5%, including accrued interest of $0.7 million;

up to $15 million of the remainder, if any, together with borrowings under the term loan facility that NORD intends to enter into at the close of this offering, to redeem $318.5 million of its 10.25% senior secured notes due 2017 and $97.5 million of its 8.50%/9.50% senior PIK toggle notes due 2018 at redemption prices of 100%, including “make-whole” premiums and accrued interest of $57.5 million; and

the balance, if any, to partially redeem its preference shares held by Premier Education Holdings and members of its management or general corporate purposes.


DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer


Symbol Name Price Change % Volume
IFCI Ifci International Corp 0.10 0.00 0.00 0


Emerging Growth

Kiwa Bio-Tech Products Group Corp

Kiwa Bio-Tech Products Group Corp develops, manufactures, distributes and markets, cost-effective and environmentally safe bio-technological products for agriculture in China.

Private Markets


D-Wave Systems is the first quantum computing company. Its mission is to integrate new discoveries in physics, engineering, manufacturing, and computer science into breakthrough approaches to computation to help solve…


Trustify provides trust and safety in both the digital and physical worlds through our vast network of on-demand Private Investigators.By removing the large retainers and high hourly rates that traditional…