Blackstone Picks Up 37.5% Stake in Aakash Educational Services For Rs 1,350 Crore
Participants sit with notebooks during a counseling session. (Photographer: Dhiraj Singh/Bloomberg)

Blackstone Picks Up 37.5% Stake in Aakash Educational Services For Rs 1,350 Crore

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Private equity firm Blackstone has picked up 37.5 percent stake in exam preparation firm Aakash Educational Services Ltd for Rs 1,350 crore valuing the institution at $500 million (over Rs 3,545 crore), according to sources.

Blackstone, which last week received approval from the Competition Commission of India for buying 51 percent stake in Aakash Educational Services Ltd., is keeping options open to hike stake in the institute.

In a statement, the two companies said their partnership will help in building AESL as India's largest digitally enabled, omni-channel education company.

“The deal values AESL at $500 million and Blackstone has paid Rs 1,350 crore for the 37.5 percent stake,” a source said.

Considering the fact that the private equity firm received CCI approval for 51 percent stake last week, it still has headroom to increase stake in Aakash Educational Services, the source added. However, picking up of any additional stake will depend on how Aakash Educational Services performs going forward and also on how the market shapes up, the source said.

As part of the deal, which was completed on Wednesday, Blackstone will have two directors on the board of Aakash Educational Services.

“AESL has seen significant growth in the last decade, becoming one of the largest education companies in the country. By leveraging Blackstone's global reach and expertise, this partnership will aid our push into newer areas and cutting-edge education technology, enabling us to deliver long-term value to our students, employees, investors and other stakeholders,” Chairman and Managing Director J C Chaudhry said in the statement.

Blackstone Head of India Private Equity Amit Dixit said the firm is investing in Aakash Educational Services since it is the most scaled up test preparation business in India with a professional management team and best-in-class corporate governance.

Live tutoring, whether in physical or online classrooms, has proven to be an effective model globally for delivering consistent results in standardised tests. Aakash Educational Services has been a leader in this model in India, delivering exceptional results in NEET and JEE examinations year after year, he added.

"Our thesis is to accelerate AESL's push in online live tutoring, both organically and through acquisitions. We are excited to partner with Aakash and his management team to deliver on this vision," Dixit said.

Aakash Educational Services is a leading medical entrance test preparation provider with a network of more than 200 centres across 130 cities, teaching more than 2.5 lakh students with growing digital presence.

Blackstone Managing Director Amit Jain said, "We plan to supplement this strong physical network by growing Aakash Educational Services’s digital segment to create India's largest omni-channel test preparation company."

(The story has been updated by PTI to reflect corrections.)

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