Gems shelves plan for its London IPO

london/abu dhabi — The initial public offering (IPO) of Blackstone-backed, Middle East-focused education company Gems has been shelved, three sources familiar with the matter said.

Sources familiar with the deal had said the London listing was delayed after authorities in Dubai unexpectedly decided to freeze tuition fees, meaning the company’s financial forecasts had to be adjusted.

“Bankers knew this wouldn’t go ahead as Gems was unsure about its expansion plans,” a banker in the region said.

One of the sources said private equity firm CVC had expressed an interest in acquiring Gems, but it was not clear whether the parties were still in talks.

Earlier this year, bankers said Gems, which operates more than 250 schools across 14 countries, could have a market capitalisation of around $4.5 billion to $5 billion. That would have made it the biggest IPO in London since July 2017 in terms of market capitalisation.

Gems is majority-owned by Dubai-based Varkey Group, which has interests in education, healthcare, construction and facilities management.

It is also backed by Dubaibased Fajr Capital, Bahraini state investment fund Mumtalakat as well as investment firm Blackstone which acquired a significant minority stake in 2014.

The London exchange is targeting more companies in the Middle East, seeking to convince investors it is attractive despite uncertainty about how Brexit will affect London.

In the six months to February 28, Gems’ adjusted earnings before interest, tax, depreciation and amortisation were $206.0 million, up from $194.3 million in the comparable period the year before.