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EuroKids, a leading playschool chain in the country controlled by US private equity firm KKR, is in preliminary talks to acquire from Zee Learn’s largest pre-school chain Kidzee for Rs 1,000–1,200 crore people aware of the development said.
- The group that owns Zee Entertainment Enterprises channel, DishTV direct-to-home network and Essel Propack specialty packaging company is fighting a debt repayment problem close to Rs 7,500 crore across its diversified businesses.
EuroKids, a leading playschool chain in the country controlled by US private equity firm KKR, is in preliminary talks to acquire from Zee Learn’s largest pre-school chain Kidzee for Rs 1,000–1,200 crore people aware of the development said.
The transaction, if it goes through, will further deleverage its consolidated balance sheet by Subhas Chandra-promoted Essel Group, sources said.
The group that owns Zee Entertainment Enterprises channel, DishTV direct-to-home network and Essel Propack specialty packaging company is fighting a debt repayment problem close to Rs 7,500 crore across its diversified businesses.
A spokesperson for the Essel Group said both strategic and financial investors have shown interest in their vertical Zee Learn education and that these offers are “actively evaluated” by the group.
“Zee Learn Ltd’s divestment is in line with the group’s overall asset divestment process,” the person said. “At this point, due to confidentiality agreements, no additional details can be shared.”
In over 750 cities across the country, Zee Learn has over 1,900 kidzee pre-schools. It also has the fastest-growing K-12 school chain in the country, Mount Litera Zee Schools (MLZS), with over 120 schools in 110 cities across the country, in addition to Zee Institute of Media Arts, Zee Institute of Creative Art, and Himgiri Zee University, a UGC-approved state-owned private university in Dehradun. EuroKids is looking to expand its portfolio aggressively.
Punit Goenka, CEO of Zee Entertainment, had said in an investor call in October, “We have been approached for the Zee Learn stake by some marquee investors, both strategic and financial, and we are seriously considering their offers.”
While part of its attempts to balance debt, the company is already selling noncore assets in infrastructure and financial services. It can also sell some of the promoters ‘ shares in the Zee Entertainment flagship pledged to creditors.
Essel Group said the group is in steady and constructive dialog with all creditors in an exchange filing in September and tried to extend the debt repayment deadline to a few mutual funds and non-bank institutions.
For the year ended March, Zee Learn more than doubled its consolidated revenue at Rs 549 crore against Rs 272.50 crore in FY18. Its income after tax increased in the previous fiscal year to Rs 83 crore from Rs 49 crore. His revenue from education and related activities stood at Rs 398 crore in FY19, compared to Rs 186 crore in FY18. The FY19 Ebitda of Kidzee was about Rs 70 crore.
Zee Learn’s Mount Litera Zee School works with local educational trusts and provides services such as school set-up assistance, teacher training, assessment, teaching materials, learning opportunities for students and branding. It also operates five business-operated schools managed by CBSE, as well as an IB school at BKC Mumbai.
EuroKids is one of the largest providers of pre-school and kindergarten education services to-12 segments in India. Its portfolio brands, including EuroKids, EuroKids DayCare, Kangaroo Kids, EuroSchool and Billabong International, represent over 120,000 students from 1,115 pre-schools and 35K-12 schools across five continents.
