EF Education First Pauses $2 Billion Sale of China Unit
EF Education First Pauses $2 Billion Sale of China Unit
(Bloomberg) -- EF Education First Inc.’s planned sale of its $2 billion Chinese business is in limbo as bidders struggle to assess the impact of the coronavirus outbreak on its operations, according to people familiar with the matter.
The sale process is on hold as EF Education First, which runs educational tours and classroom-based courses, works to adapt to a new environment where nearly all learning is moving online, according to the people. Such change has affected what potential private-equity buyers are willing to pay, said the people, who asked not to be identified because the information is private.
While suitors have stopped active deal negotiations for now, the process could be revived when concerns over the pandemic have eased, the people said. EF Education First could also pursue other options for the business, they said.
EF has migrated more than 250,000 students in China from offline to online channels since the coronavirus outbreak, and the pandemic will not change its long-term commitment to the market, its representative said in an emailed response to Bloomberg News. The representative declined to comment on the Chinese unit sale.
EF, a closely-held business founded by Swedish billionaire Bertil Hult in 1965, was seeking from $1.5 billion to $2 billion for the China business, people familiar with the matter have said. Private equity firms including Permira, Warburg Pincus, Hillhouse Capital and General Atlantic had shown an interest in the business, the people said at the time.
Hult founded EF to provide combined language instruction and travel, according to the company’s website. The Lucerne, Switzerland-based company offers educational tours and cultural exchange programs as well as classroom-based and online language training. It’s one of the largest English-language training providers in China, with over 300 schools across 60 cities including Beijing, Shanghai and Shenzhen.
This marks the latest deal that has been impeded by the impact of the virus. KKR & Co. has also suspended its planned sale of Goodpack Ltd., a Singaporean provider of intermediate bulk containers, after bids fell short of expectations, Bloomberg News reported on Wednesday.
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