Anhanguera Goes Large in Uniban Buy

Brazilian secondary education company Anhanguera Educacional Partipacoes has agreed to acquire peer Uniban for BRL510m ($286m), a larger-than-usual acquisition that allows it to pick up what analysts call one of the last large university players. The BRL382.6m paid for operations and BRL128m for three real estate assets is “slightly expensive,” Itau says, but notes the “scale, strategic fit and synergies justify the price.” Anhanguera bid about BRL6,900 per student for the 55,000 students the deal adds, an analyst at another shop says, a slight premium considering most deals in the sector come at BRL6,000 per student. It is not a surprising amount, though, as transactions in the past have gone as high as BRL8,000, he adds. The size of the transaction is up from its typical sub-BRL100m buy that Anhanguera and its peers engage in frequently as they drive to consolidate the country’s secondary education sector. “Consolidation is a major driver in the sector, and we continue to see Anhanguera as among the best positioned to come out on top, based on its superior, replicable model, its scale and its track record of acquisitions,” Itau says. With the deal, Anhanguera adds nine campuses in Sao Paulo and three others in states in the southern region. Analysts say the move makes Anhanguera the clear leader in Sao Paulo, though the university space still remains fragmented. Additionally, the buy allows the educator to execute on synergies including distance learning, which Uniban is authorized to implement, according to a company investor call Monday. It also indicated that it expects to slow its acquisition process for the next few months while it integrates Uniban and other deals it has executed over the past nine months. Anhanguera will pay BRL235m at closing and BRL285m within 24 months. It has been funding its acquisitions with proceeds from a BRL734m equity follow-on done in late 2010. The company declined to comment on any financial advisors used in the transaction.