Southern Capital said to seek exit from Singapore’s Star Learners

A child plays with a toy camera. Photo: Tanaphong Toochinda

Singapore-headquartered private equity firm Southern Capital is said to seek an exit from early childhood education and daycare centre chain Star Learners, two people with knowledge of the development told DealStreetAsia.

Southern Capital is understood to have roped in Deloitte as the sell-side advisor on the deal. Southern Capital holds a majority stake in the education service provider, in which it invested a few years ago, said the people mentioned above.

Though the official stake sale process is yet to begin, Southern Capital is understood to have held early-stage discussions with some potential buyers including PE firms focused on education as well as strategic players.

In this transaction, Southern Capital is said to be seeking around 15x to 16x of EBITDA multiple for its stake in the education firm. The sources said, Star Learners’ annual EBITDA is in the region of $7 million and the company is said to be valued at $100-110 million.

Founded in 2003 by local businessman Tan Meng Wei, Star Learners operates a chain of childcare centres across Singapore with over 30 branches, according to its website. The childcare chain now has more than 2,500 students with 500 employees.

An email sent to Southern Capital seeking comments on the development is unanswered at the time of publishing this article.

Apart from Star Learners, the Singapore-based PE firm is also known to explore an exit from another of its education portfolio firm, Canadian International School (CIS), as reported by Bloomberg earlier. It is working with Rippledot as the sell-side advisor for the process.

The sale of the CIS business could be for around $500 million, the report added. Founded in 1990, the school has around 3,000 students across two centres in the city-state.

Meanwhile, Southern Capital hit a final close of its fourth fund at $500 million, as reported by DealStreetAsia in May this year. The firm’s fourth fund was launched in 2017, while in early 2018 the firm received $80 million of commitment from a consortium of investors including Dutch PE major AlpInvest Partners and Singapore’s sovereign wealth fund GIC.

In January 2019, the firm received investment commitments from several family offices, endowments and pension funds. Similar to its previous funds, Southern Capital’s Fund IV will follow the investment thesis of placing bets on Southeast Asia’s mid-market business with enterprise value between $20 million and $200 million.

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.