Private equity firms Hillhouse Capital and Permira are among suitors that have submitted first-round bids for Chinese operations being sold by EF Education First Inc., people familiar with the matter said.
Warburg Pincus is also among suitors that have expressed interest in part or all of EF Education First’s business in the country, according to the people. The sale could fetch $1.5 billion to $2 billion, the people said, asking not to be identified because the information is private.
Education companies are looking to meet the needs of Chinese students and their parents who see fluency in foreign languages and academic excellence as giving an edge in the increasingly competitive job market. The nation’s online education market reached 252 billion yuan ($36 billion) in revenue in 2018 and is projected to grow at least 16% annually in the next 3-5 years, according to iResearch Consulting Group.
EF Education First, founded by Swedish billionaire Bertil Hult in 1965, provides both classroom-based and online English language training to kids and adults across Asia and Europe, its website shows. The company also offers educational tours and cultural exchange programs. It’s one of the largest English-language training providers in China, with over 300 schools across 60 cities including Beijing, Shanghai and Shenzhen.
Some bidders may only be interested in the children’s education business of EF English First and may not want to acquire its training operations targeting adults, the people said. No final decisions have been made, and there’s no certainty the suitors will proceed with firm offers, according to the people.
Representatives for Hillhouse and Permira declined to comment. Representatives for EF Education First couldn’t immediately be reached for comment, while a spokeswoman for Warburg Pincus couldn’t immediately comment.