ADDAX Investment Bank Launches Addax Education Holdings

Date : 19 August 2007

Addax Investment Bank’s latest venture to focus on The Middle East education sector.

Bahrain-based investment bank, Addax Investment Bank, has announced the launch of Addax Education Holdings (AEH), its latest venture. AEH, a holding company based in the Kingdom of Bahrain, was established by Addax Investment Bank in partnership with a team of education and private equity professionals to invest and manage education and education related businesses across the GCC, Levant and North Africa.

At a press conference held today in the Kingdom of Bahrain, the shareholders of AEH, which include Addax Investment Bank, Hugh MacPherson, Louay Khatib, and Elaph Investments, announced their first project, Education Capital (EdCap). Speaking at the press conference were Yousef Al-Essa, Chief Executive Officer, Addax Investment Bank; Hugh MacPherson, Chief Executive Officer, AEH, Louay Khatib, Managing Director, AEH and Fahmi Al Shawwa, Managing Partner, Elaph Investments.

In addition to its role as seed investor, Addax Investment Bank is acting as the sole placement agent for Education Capital. EdCap is expected to raise US$100 million in funds and is now open to investors.

Speaking at the press conference Yousef Al-Essa, Chief Executive Officer, Addax Investment Bank said, “The education landscape in the Middle East has undergone significant change in recent years as the demographics in most Arab states have shifted. The Middle East region has a young population which is continuing to grow; as such we need to develop high calibre schools now so that we can later reap the benefits of having a skilled, educated workforce.”

“The education environment today is highly competitive particularly at the post-secondary stage. In order for the GCC and other Middle Eastern countries not to lag behind, we need to emphasize the importance of high-quality, private sector education. Privatization of educational institutions is the key to ensuring our graduates are on par with the rest of the world and are equipped to meet the challenges of today,” he added.

Hugh MacPherson, Chief Executive Officer, AEH, said, “EdCap will endeavour to undertake projects with the aim of enhancing the existing privatised model of schooling in the Arab region. We believe that high quality, affordable, internationally recognised private education at both the primary and secondary level has become a key focus for parents in the Middle East region.

“The 21st century employment market requires the young employee to have an international dimension, transferable skills, multi-tasking capacity and developed inter-personal competency – schools play a pivotal role in developing all these facets,” he added.

Louay Khatib, Managing Director, AEH, said, “Potentially, the global demand for private education will reach 5.4 million students by 2025- up from 1.9 million today. This increasing demand for schooling is non-cyclical making the industry virtually recession proof. Based on our research the schooling sector in the MENA region is in the range of US$21 billion, translating to around 5% of the worldwide market of K-13 school sector.”

EdCap’s strength lies in its business model which focuses on the operational strength and extensive educational experience of the management team. These factors contribute to making EdCap an attractive, unique investment opportunity.

EdCap’s strategy of viewing the education sector from a private equity perspective provides an exceptional business model that requires highly defined education experience unavailable to generalist investors and funds.

The Private Placement Memorandum relating to “Ed Cap”, will soon be released to select group investors after obtaining the approval from the Central Bank of Bahrain.