Mumbai-based tours and travel company Cox & Kings Ltd has agreed to sell its education business to private investment firm Midlothian Capital Partners for an all-cash enterprise value of £467 million (Rs 4,387 crore or $600 million) in cash.
The education business comprises HB Education Ltd, a wholly owned subsidiary of European holiday specialist Holidaybreak Ltd. Cox & Kings had acquired Holidaybreak in 2011, in a deal valued at $510 million (Rs 2,260 crore then).
The sale is in line with the company's stated goal of unlocking value and maximising shareholder returns, Cox & Kings said in a stock-exchange disclosure.
"Since Cox & Kings acquisition of Holidaybreak in 2011, the business... has scaled larger heights. Over the years we have made efforts to maximize shareholder value by divesting some parts of the business, reduce debt and focus on high growth asset light businesses," said Peter Kerkar, group chief executive officer at Cox & Kings.
The transaction is subject to regulatory approvals, consents and customary closing adjustments. The deal is likely to be closed by 23 November.
HB Education provides experiential learning programmes for students through residential activity centres and educational travel tours. Its programmes are curriculum-linked and help teachers improve students' knowledge and understanding.
The company's portfolio of brands includes PGL, NST, EST, Travelworks and Studylink.
The consolidated revenue of HB Education stood at Rs 1,383.3 crore in the year through March 2018. It comprised about one-fifth of the total revenue of Cox & Kings.
Baird and Axis Capital Ltd acted as financial advisers to Cox & Kings for this transaction. Eversheds Sutherland acted as the legal counsel.
Established in 2015, UK-based Midlothian Capital Partners is focussed on consumer and retail industries.
HB Education is Midlothian’s third consumer-sector deal in the past two years. It had bought Dobbies Garden Centres from Tesco in 2016 for £210 million and purchased holiday home operator Park Leisure for £110 million in 2017.
Over the past few years, Cox & Kings has been divesting assets to sharpen its focus on leisure and hybrid hotels as well as to pay off debt. It has operations in 22 countries.
In March this year, private equity firm SSG Capital Management acquired an additional 11.58% stake in Cox & Kings’ UK subsidiary Prometheon Holdings Ltd.
In December 2015, the company sold its UK-based adventure holiday unit Explore Worldwide Ltd to Hotelplan UK Group for £25.8 million (about $39 million).
In October 2015, the company acquired UK-based hotel booking website LateRooms.com for £8.5 million ($13 million). However, the following year Cox & Kings sold LateRooms.com and Superbreak for about £29.25 million (about $43 million) to UK-based Malvern Enterprises and acquired a 49% stake in Malvern for £6.37 million (about $9 million). At the time, the company had said the proceeds from the twin deals would be used to pay off debt.