Our assessment of Nord Anglia's adequate liquidity position reflects the group's healthy cash balances, ongoing free cash flow generation, and full availability under the proposed $545 million RCF (down to $525 million in 2024). Please see Ratings Criteria at www.standardandpoors.com for further information. Find out more about the current Nord Anglia Education Inc valuation measures and financial statistics. The resulting capital structure is expected to be $1.9 billion equivalent of first-lien debt maturing January 2028, $409 million second-lien debt maturity September 2028, and a $545 million RCF, reducing to $525 million in 2024, maturing August 2027 (expected to remain undrawn at closing and to be used for the group's working capital needs). May 5, 2022 Global " K-12 International Schools Market Report " Research Report 2022 - 2028 contains a thorough examination and detailed analysis of the top major players, market size, share, and. When there is a merger or consolidation involving at least one Cayman company under Part XVI of the Companies Act, a dissenting shareholder may demand payment of the fair value in respect of all his shares. When it comes to disclosure by the dissenting shareholder, such obligation tends to be more limited in scope. Otherwise, we render a sell signal. Under the proposed capital structure, the group is expected to borrow approximately $1.9 billion equivalent first-lien debt, split between euros and dollars, with approximately $1.4 billion equivalent in euros. The most common multiple used in the valuation of stocks is the N/A multiple (Price to Earnings). e--Estimate. Nord Anglia Education is seeking to refinance its existing capital structure, extending the upcoming 2024 and 2025 maturities by three years. While the group has made significant acquisitions in the past, leading to a total cash outflow of $262 million in 2022, we do not factor any transformational acquisitions into our base case. PDF FSD Users Sub -committee - Section 238 Proceedings SUMMARY - Judicial You may also purchase it directly from the company, but this is not always possible and may require contacting the company directly. That said, we expect the group to hold solid cash balances in the foreseeable future. Enterprise Value is a firm valuation proxy that approximates the current market value of Nord Anglia. [10] Documents pertaining to the motivations or involvement of the shareholders (for example, if they are "speculative investors engaged in arbitrage or long-term shareholders who are being 'taken out' against their will") are generally considered to be irrelevant, as the fair value of the dissenting shareholders' shareholding needs to be determined in any event for all dissenting shareholders and regardless of whether or not they might be said to be more or less 'deserving'. Where there are any decisions to be made in respect of uncertain or complex tax issues, these will be made with due regard to technical analysis from the NAE tax team and, where appropriate, in consultation with experienced third party advisors. The removal of the COVID-19-related restrictions across the globe has led to an increase of ancillary businesses, including boarding schools. 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Nord Anglia Education (Bach Finance Ltd.)'s 2022 results showed an improved performance, with revenue above pre-pandemic levels and S&P Global Ratings-adjusted EBITDA margins at about 35%, thanks to its ability to increase school fees, despite being hampered by COVID-19-related mobility restrictions in China. UK Tax Strategy | Nord Anglia Education Alternatively, call one of the following S&P Global Ratings numbers: Client Support Europe (44) 20-7176-7176; London Press Office (44) 20-7176-3605; Paris (33) 1-4420-6708; Frankfurt (49) 69-33-999-225; or Stockholm (46) 8-440-5914. Get ready for a world-class education at our premium international schools in the Americas, Europe, Asia, and the Middle East. Class of 2023 IBDP Results. In particular, there has been a reasonably uniform approach concerning extensive initial documentary disclosure required by a company by way of uploading relevant documents to a data room. The Content is provided on an as is basis. Key Facts 81 Schools 32 Countries 70,000 Students worldwide CREATE YOUR FUTURE Get ready for a world-class education at our premium international schools in the Americas, Europe, Asia, and the Middle East. Local regulations prevent some of Nord Anglia's subsidiaries from providing upstream guarantees. Rating-related publications may be published for a variety of reasons that are not necessarily dependent on action by rating committees, including, but not limited to, the publication of a periodic update on a credit rating and related analyses. work for us Working for Nord anglia. Nord Anglia is seeking to extend its 2024 and 2025 maturities by three years up to 2027 and 2028, respectively. External advice is often sought by the tax function to ensure commercial activities are undertaken in compliance with applicable tax legislation. Nord Anglia has 70+ private day and boarding schools which are located in 30 countries across the Americas, Europe, China, Southeast Asia, India and the Middle East. We'd also like to use analytics cookies so we can understand how you use our services and to make improvements. However, the Court also expressed the view that each case will turn on its own specific facts and the date is not to be rigidly fixed for all cases. Our students had a tour of the facility and learnt about artificial intelligence (AI) from Beth, an expert in the field . However, Baring remained majority shareholder, and its affiliated funds currently control a 67% stake in the company. The NAE tax team provide advice to the business on tax-related issues, oversee UK tax compliance-related matters and manage NAE UKs relationship with HMRC and with third party advisors. 17 Nov 1989. IT Portal | Nord Anglia Education However, that decision, as observed in Nord Anglia[4], suggests that there will be a starting assumption of a minority discount; in the absence of some indication to the contrary, or special circumstances, the minority shareholders' shares should be valued as a minority shareholding and not on a pro-rata basis. In reality, business valuation is often a combination of these different approaches. We understand that there is further potential for growth in case of M&A activities that have not been included in our base case, which considers mainly organic growth and extensions within the existing school portfolio. Interestingly, the Companies Act does not specify the date at which the determination of fair value is to be made. PDF Nord Anglia Education, Inc: Grand Court decides Cayman's most - Mourant Coronavirus (COVID-19) Employment Law Resources, Environmental, Social and Governance (ESG), Cayman Islands Economic Substance Requirements, Cayman Scholarships and Articled Clerk Training Program, England and Wales Solicitors Training Programme. Welcome to Nord Anglia Education Portal. The Court's methodology in weighing expert evidence is taken from Delaware jurisprudence, cited in Shanda Games: [2], "In making the fair value determination, the court may look to the opinions advanced by the parties' experts, select one party's expert opinion as a framework, fashion its own framework, or adopt piecemeal some portion of an export's model methodology or mathematical calculations. Founded in 1972, Nord Anglia teaches some 37,000 students at43 schools in China, Europe, the Middle East, North America and Southeast Asia. Section 238 proceedings are hard fought, often for high stakes and involves highly experienced experts. The (current) company valuation of Nord Anglia Education Inc. is therefore way below its valuation average over the last five years. The Group Head of Tax has responsibility for the tax function and is accountable to the Chief Financial Officer. The Company and the Dissenters shall have leave to instruct one expert witness each (the Dissenters to jointly and severally instruct one expert between them) in the field of valuation in order to opine upon the fair value of the Dissenters' shares in the Company, valued as a going concern as at 21 August 2017 (" Valuation Date") (together . We expect this will have a significant impact on Nord Anglia's cash interest expense, which we expect to increase by about 50% up to approximately $300 million (including lease interest expense), from about $200 million. Group revenue to grow by 8%-10% in fiscals 2023 and 2024 supported by increasing capacity (excluding China Bilingual) from 93,610 by about 4% in 2023, and a further 4%-5% in 2024. Nord Anglia Education, Inc. (NORD): $0.77 0.02 (+2.67%) POWR Rating Get Rating Component Grades Growth Get Rating Value Get Rating Momentum NR Stability NR Sentiment Get Rating Quality NR Add NORD to Watchlist Industry: Outsourcing - Education Services Industry NR Ranked in industry See All 'A' Rated Buy Stocks NORD Price/Volume Stats This document was drafted by NAEs in-house tax department, with input received from senior executives within the business, and was approved by NAEs Chief Financial Officer. Nord Anglia Education's Profile, Revenue and Employees. The group and its sponsors proactively manage its foreign exchange exposure and have in the past swapped its operational currencies into euros when required. The first directions hearing came before the Court in January 2022. S&P may receive compensation for its ratings and certain analyses, normally from issuers or underwriters of securities or from obligors. The Nord Anglia Education ("NAE") group is the world's leading premium international schools organisation. About Nord Anglia Education why us? Further acquisitions are likely in the near future, Nord Anglias CEO, Andrew Fitzmaurice, indicated at the time:Nord Anglia Education continues to have an active pipeline of excellent acquisition opportunities to further expand our global network., Nord Anglia Education continues to have an active pipeline of excellent acquisition opportunities. The stable outlook reflects our expectation that Nord Anglia will continue to expand its learning facilities' capacity and utilization rates at a sustainable pace as well as passing on fee increases to offset the inflationary environment. Our valuation of the group as a going concern reflects its leading brand and position in the premium international school market, established network of teachers and administrators across multiple jurisdictions, and its large, stable student base. The Content should not be relied on and is not a substitute for the skill, judgment, and experience of the user, its management, employees, advisors, and/or clients when making investment and other business decisions. Discounted cash flow (DCF) valuation of Nord Anglia Education Inc and Reverse DCF Model. NAE is committed to continuing this approach, consistent with NAEs code of conduct and ethical guidelines. MET students achieved an average score of 32.5. We use cookies to improve your online experiences. The group's limited cash generation in relation to its balance sheet is reflected in a weak FOCF after leases to debt (excluding preference shares), below 1% in 2023 and only marginally increasing toward 2%-3% in 2024. In Shanda Games, the dissenting shareholders argued as part of the appraisal process that they should be paid a pro-rata share of the full value of the company. We anticipate that the group will continue to build organic capacity by investing in school extensions, leading to an average capacity growth of 4%-5% over the next two years. To the extent that regulatory authorities allow a rating agency to acknowledge in one jurisdiction a rating issued in another jurisdiction for certain regulatory purposes, S&P reserves the right to assign, withdraw, or suspend such acknowledgement at any time and in its sole discretion. The removal of the COVID-19-related restrictions across the globe has led to an increase of ancillary businesses, including boarding schools. The acquisition valued Nord Anglia's enterprise value at about $4.3 billion. Cumbria and the North East Medical Appraisal and Revalidation | NHS England However, given the elevated leverage levels, we consider that the group would be unable to withstand low-probability, high-impact events without the need to refinance the existing debt. News. Attempts to expand the dissenter shareholders' discovery obligation beyond the Qunar categories in subsequent cases have been largely unsuccessful. We anticipate top-line growth and improved profitability metrics over the next 12-24 months, though we expect a small drop in EBITDA margin in 2023 before recovering in 2024. before the resolution approving the merger takes place, legal advice should be obtained sooner rather than later. S&P Parties disclaim any duty whatsoever arising out of the assignment, withdrawal, or suspension of an acknowledgment as well as any liability for any damage alleged to have been suffered on account thereof. In Sina Corporation[8], the company was faced with a different type of difficulty in complying with its disclosure obligations. 9-11, [8] In the Matter of Sina Corporation FSD 0128 of 2021 (25 January 2022), [9] In the matter of Qunar Islands Limited [2018 (1) CILR 199], [10] See for example JA Solar Holdings Co., Ltd. (Unrep. In Qunar[9], the Court of Appeal limited the dissenting shareholders' disclosure to certain categories of documents which related to the value of the company under consideration. It added two as yet unnamed schools in Europe and the Middle Eastto its stable in March, enrollingsome 4,400 students, in two separate deals worth a combined $147m. Being part of Nord Anglia Education means we're able to draw on the expertise of thousands of outstanding teachers worldwide. The fair value per share was determined to be US$37.68 (US$7.23 in excess of the market price). We expect revenue to increase by 8%-10% over the next two years, mostly driven by increasing utilization toward 72%-74% and rising fees across all geographies--though a weak euro versus dollar could hinder Europe's reported performance. a--Actual. The company, backed by a strong management team, is well positioned to benefit from the rising demand for high-quality education in the kindergarten to grade 12 category globally, has demonstrated strong financial performance, delivers stable cash flows and provides a platform for future growth in this sector, Orida added. LONDON, Jan 26 (Reuters) - Nord Anglia Education, a London-based private school operator backed by private equity firm EQT (EQT.N), raised about 2 billion euros ($2.18 billion) of debt on. Ultimate responsibility for managing NAEs tax risks and tax compliances lies with the Board, with this responsibility delegated to the Chief Financial Officer. If the company and the dissenting shareholder cannot reach an agreement on the price within a specified period, the company shall (and any dissenting shareholder may) file a petition with the Grand Court of the Cayman Islands for an appraisal and/or determination of the fair value of the dissenting shareholder's shares. 624643) under the Companies Management Act (as revised). All transactions entered into must have commercial rationale and substance, in addition to being consistent with the NAE Groups code of conduct and ethical guidelines. Nord Anglia Education - Wikipedia However, in the case of Sina Corporation, at the time of the EGM there was material uncertainty as to whether the transaction would complete due to the prospect of a key condition precedent not being satisfied and there was a three-month gap between the EGM and the date of completion. S&P's public ratings and analyses are made available on its Web sites, www.spglobal.com/ratings (free of charge), and www.ratingsdirect.com (subscription), and may be distributed through other means, including via S&P publications and third-party redistributors. Borrowing in euros exposes the company to foreign exchange risk in the absence of a hedging policy. You've accepted analytics cookies. April 25, 2023 at 6:18 PM EDT Listen 2:06 Investment firm BPEA EQT reached an agreement with Endeavor Group Holdings Inc. to buy IMG Academy, the entertainment behemoth's sports arm for developing. As a result, we expect Nord Anglia to maintain sound headroom under the springing covenant of more than 30%. We think the group will continue to benefit from organic growth over the next 12-24 months, as it continues to increase school fees across all geographies by about 4%-5%, and improves utilization rates. Although some of this balance is held in jurisdictions with potential cash repatriation restrictions, we think the group will be able to use these funds to finance local operations, greenfield investments, and acquisitions; Full availability under the $545 million RCF; Cash funds from operations (FFO) of about $110 million-$130 million; and. However, this remains significantly above pre-pandemic levels, with margins around 30%. No content (including ratings, credit-related analyses and data, valuations, model, software, or other application or output therefrom) or any part thereof (Content) may be modified, reverse engineered, reproduced, or distributed in any form by any means, or stored in a database or retrieval system, without the prior written permission of Standard & Poors Financial Services LLC or its affiliates (collectively, S&P). The group also announced its expansion into Ireland in the same month, with an 800-seat school inDublin set to open in September next year. [6], the directions orders made in each Section 238 case are to some extent bespoke, but a uniformity of approach in relation to certain issues is discernible from the decisions and orders made. One of the most widely used quantitative methods is the market multiples method. Appraisal has restarted for all UK doctors in October 2020, after a suspension of six months during the height of the first wave of the Covid crisis. Careers | Nord Anglia Education NHS England fully apprecaite that the future is far from certain, and spikes of Covid may lead to future local or . Level of acceptable risk in relation to taxation The company valuation of Nord Anglia Education Inc. according to these metrics is way below the market valuation of its peer group.The N/A ratio of Nord Anglia Education Inc. is significantly lower than the average of its sector (Business Support Services): 13.26. Global K-12 International Schools Market in 2022 Perspectives for 2028 We expect this to have a significant impact on the group's cash flow and interest coverage. Nord Anglia Education Salaries in Shanghai, China | Glassdoor The market valuation is utilized generally as a primary market input, to provide an objective starting point for the valuation. The company valuation of Nord Anglia Education Inc. according to these metrics is way below the market valuation of its peer group. We anticipate that the increasing interest rate environment will weigh on Nord Anglia's cash flow generation. [11]. Governance factors are a moderately negative consideration in our credit rating analysis of Nord Anglia, as it is for most rated entities owned by private-equity sponsors. This is because, in a merger, the offeror does not acquire control from any individual minority shareholder. Nord Anglia Education Inc (NORD) DCF Valuation - GuruFocus Rating Action Overview Nord Anglia Education (Bach Finance Ltd.)'s 2022 results showed an improved performance, with revenue above pre-pandemic levels and S&P Global Ratings-adjusted EBITDA margins at about 35%, thanks to its ability to increase school fees, despite being hampered by COVID-19-related mobility restrictions in China. As a result, we expect FOCF after leases to drop below $50 million in 2023 but remain positive, returning to growth in 2024 as profitability improves. Hong-Kong based international schools operator Nord Anglia Education is set to be taken private again in a $4.3bn deal with Canada Pension Plan Investment Board and Baring Private Equity Asia. The Court however would not simply kick the can down the road. Where appropriate, tax risks are escalated to the Group Head of Tax and the CFO, and reported to the Audit and Risk Committee. You've rejected analytics cookies. The proposed refinancing transaction allows Nord Anglia to extend its maturity profile, avoiding refinancing risk and enhancing liquidity. Carey Olsen is experienced in advising on section 238 proceedings and are prepared to navigate its clients through the different stages of the process. Principal liquidity sources (for the 12 months from Aug. 31, 2022): Principal liquidity uses for the same period include: Nord Anglia has a springing first-lien net leverage covenant at 8.5x (up from 7.0x following this transaction), tested when RCF drawings are above 40% of total RCF commitments. Congratulations to our Class of 2023 who - Nord Anglia Education Capex of $100 million-$120 million, comprising maintenance projects of $70 million-$80 million and about $30 million-$40 million of growth capex. Nord Anglia reported good revenue and EBITDA growth in 2022, largely supported by an increase in revenue per student, while utilization rates remain below pre-pandemic levels. It has been majority-owned by Baring Private Equity Asia since 2008, and was listed on the New York Stock Exchange in a $300m IPO in 2014. S&Ps opinions, analyses, and rating acknowledgment decisions (described below) are not recommendations to purchase, hold, or sell any securities or to make any investment decisions, and do not address the suitability of any security. The education sector is intrinsically exposed to changes in regulation, and Nord Anglia has been highly affected by the Chinese government's decision to ban direct foreign ownership of private schools that impart mandatory education for Chinese nationals.