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Endeavour to sell IMG Academy to BPEA EQT for $1.25 billion

Updated: Oct 30, 2023

Acquisition Overview

IMG Academy, a sports-focused educational institution in Florida, has been acquired by BPEA EQT, the private equity arm of Swedish investment company EQT. The deal is valued at $1.25 billion and is expected to be completed in Q3 2023. As part of the acquisition, IMG Academy will partner with Nord Anglia Education, a BPEA EQT portfolio company that operates international schools across Asia. The acquisition is expected to help IMG Academy expand its educational offerings beyond sports and broaden its reach across Asia. The sports education market is growing, with a focus on health and well-being within academia, and a willingness to spend on education. IMG Academy has more than 30,000 students, and the Nord Anglia group supports over 75,000 students across 81 schools and 32 countries. The acquisition is expected to bring together two world-class education brands and leverage synergies between them.

Deal structure

BPEA EQT is set to finance this acquisition through cash, the total reflecting IMG Academy’s enterprise value of $1.25 billion. The two companies anticipate the deal to close in the third quarter of this year. As part of this transaction, IMG Academy’s executives, including President Brent Richard, will stay on in their roles. BPEA EQT was advised by Deloitte (Financial and Tax), Oliver Wyman (Commercial), and Ropes & Gray (Legal.) Endeavour was advised by The Raine Group (Financial and Tax), and Latham and Watkins LLP (Legal.)

IMG Academy Overview

Headquartered in Bradenton, Florida, IMG Academy supports student-athlete development across its on-campus and online student-athlete education experiences. Founded in 1978 as the Nick Bollettieri Tennis Academy, IMG Academy’s offerings expanded to include golf, soccer, basketball, football, lacrosse, volleyball, and baseball following its acquisition by IMG in 1987. IMG Academy’s subsequent acquisition by Endeavour, a holding company for talent and media agencies, enabled the educational institution to expand both its on-campus and online business. Now, the company’s assets include a campus in Florida, sports camps across the US, and an online coaching and college recruiting business. In fact, regarding the latter, the company is known for its strong outcomes from Ivy League colleges to the professional league. IMG Academy is the leader in a large and growing sports education market, helping to place more than 30,000 students in college sports rosters in 2022. In terms of its future growth potential, the company is likely to benefit from a growing focus on health and wellbeing within academia, and an increasing willingness to spend on education. IMG Academy’s curriculum aligns with current trends within education, where sports is a key differentiator for US college admissions.

Endeavour’s selling of IMG Academy to EQT comes just days after its announcement that it will increase its stake in UFC from 50.1 to 100 percent, prior to the mixed martial arts company’s IPO. Endeavour had previously planned to take UFC public in 2019 but had pulled back at the last minute, reportedly because of low investor demand.

Last Wednesday, Endeavour also announced that business mogul Elon Musk was joining Endeavour’s board of directors.

Date founded: 1978

Number of employees: 700

EV: $15.49bn

TTM Revenue: $5.276bn

Market Cap: $7.5bn

GPEA EQT Overview

BPEA EQT is part of one of the world’s largest private equity firms, EQT, a Swedish investment organisation with core investments in education, healthcare, and technology across North America, Europe, and Asia-Pacific. As part of the transaction, IMG Academy is expected to partner with BPEA EQT’s portfolio company, Nord Anglia Education, which operates some of the world’s leading international schools. Nord Anglia supports more than 75,000 students across 81 schools and 32 countries, with a specific geographic focus on Asia. Nord Anglia has experience with global education partnerships, having recently enhanced its schools' curriculum and extra-curricular by integrating material from Juilliard, MIT, and UNICEF. Accordingly, similarly to IMG Academy, the Nord Anglia group is committed to an enriching and wholistic education that ranges from the performing arts to global citizenship.

Date founded: 1994

Number of employees: 693

EV: $16.34bn

TTM Revenue: $11.35bn

LTM EBITDA: $8.1bn

Market Cap: $12.09bn

Industry Insight

The growing market for sports within the college admission process has become increasingly prominent in recent years. As colleges and universities seek to attract top talent, many institutions have begun to place a greater emphasis on athletic performance as a key factor in the admissions process. This trend is particularly evident at selective colleges. This trend is particularly evident at selective colleges where competition for admission is intense, and students must find ways to distinguish themselves from other applicants.

Furthermore, as a consequence of COVID-19, there has been a growing demand for online education. From 2011 to 2021, the number of learners reached by massive open online courses increased from 300,000 to 220 million. Between 2012 and 2019, the number of hybrid and distance-only students at traditional universities increased by 36%, while the circumstances of the COVID-19 pandemic in 2020 rapidly accelerated that growth by an additional 92%. However, the market has become increasingly competitive, with providers vying for attention from a broad set of prospective students. The forces propelling demand have also been accompanied by rising standards for online education quality. New offerings seek to provide prospective learners with cost-effective options that go much beyond a traditional curriculum. As such, though the increase in demand is undeniable, creating compelling offerings that appeal to prospective students is an ongoing challenge for many providers.

Finally, in recent years, there has been a growing market for premium education in Asia. One of the main factors driving this growth is the rising middle class in the region. As more families move into the middle class, they have greater disposable income and are willing to spend more on their children’s education. Additionally, many governments in the region are encouraging the growth of private education providers, including premium education schools. This has created a favourable regulatory environment for companies, like Nord Anglia Education, to expand their operations in the region.

Strategic Rationale

One of the key drivers behind this acquisition is the potential for growth in Asia in the sports and education market. With Asia being IMG Academy’s largest source of international students, BPEA EQT sees strong potential to support the academy’s expansion across the continent; one in which the firm has a strong track record and over 15 years of experience. Furthermore, under BPEA EQT, IMG Academy will seek to broaden its educational offering beyond sports education. Under Nord Anglia Education, IMG Academy is set to profit from global partnerships with Juilliard, MIT, and UNICEF that stretch far beyond the classroom. In turn, Nord Anglia can expect an exciting new global sports programme. Accordingly, as Komsomol Kalliarekos, Partner and CoHead of Education within BPEA EQT’S Advisory Team, says “this acquisition brings together a world-class sports education brand and a premier education group” in order to further underscore BPEA EQT’S commitment to helping IMG Academy expand across Asia.

Additionally, there is much potential for synergies across IMG Academy and Nord Anglia Education. For example, it is clear that IMG Academy is planning to leverage EQT’s digital technology capabilities to better deliver IMG Academy’s programs online. Ultimately, by leveraging IMG Academy’s strong brand and reputation, and investing in technological growth and geographic expansion, BPEA EQT can position itself as a leading player in the dynamic and rapidly growing sector of online education.

Finally, although this strategic rationale is purely speculative, it is likely that Endeavour is selling IMG Academy in order to increase its focus on UFC’s prospective IPO. UFC is a major mixed martial arts promotion company that Endeavour recently bought a 100% stake in. With the growing popularity of MMA, UFC has become one of Endeavour’s most important businesses. Selling IMG Academy could be a strategic move to streamline Endeavour’s portfolio and allocate more resources to UFC’s IPO. By divesting non-core assets, Endeavour can focus on its core businesses and enhance its growth potential.

Long term prospects

The sports education market is growing, with an increasing focus on health and well-being within academia, and a willingness to spend on education. IMG Academy has a strong position in the market, with over 30,000 students and a reputation for successfully placing students in college sports rosters, including Ivy League colleges and the professional league. The acquisition is anticipated to help IMG Academy expand its educational offerings beyond sports and broaden its reach across Asia, leveraging synergies with Nord Anglia Education, a BPEA EQT portfolio company that operates international schools across Asia. As a result, I would expect this acquisition to bring together two world-class education brands and increase their respective potential for growth both in Asia and in the online education market.

Written by Felicite Baroudel (The Queen’s College)

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