News

01 September 2012 | Education | Nord Anglia Education Ltd

Nord Anglia acquires The Regent International School in Pattaya for £20m.

​Nord Anglia Education Limited has acquired the school operations of The Regent’s International School, Pattaya (“Regent’s Pattaya”).

Regent’s Pattaya is a premium K12 international school located in Pattaya, Thailand with current enrolment for the 2013 academic year of c. 950 students. Pattaya is located on the east coast of the Gulf of Thailand, 120km southeast of Bangkok, adjacent to some of the largest industrial estates in the Eastern Seaboard region of Thailand. It is one of the fastest growing cities in the region, with a large ex-pat community.

Nord acquired the business by purchasing NNN Holding Limited's ("NNN") 49% direct and indirect interests in the share capital of Regent Pattaya Campus Management Co. Ltd (“RPCM”), a company formed to hold the acquired school’s business. The purchase price totalled THB$960 million (£20m), of which THB$700 million (£14.6m) was paid at completion and THB$110 million (£2.3m) and THB$150 million (£3.1m) are payable one year and two years after completion, respectively.

RPCM has been granted a 25 year lease over the school’s land and buildings by NNN. An affiliate will also provide consultancy services in relation to the management and operation of private international schools in Thailand. The acquisition of Regent’s Pattaya diversifies NAE’s geographic footprint in a growing market.

Comment:

At face value this looks like a poor deal for Nord Anglia. A great school, a thriving area but no freehold property, ownership limited to just 49% of the operating company and a £20m price tag.

In reality, Nord Anglia has found a creative way around Thailand's restrictive rules on foreign ownership. Foreigners may not hold freehold land directly in the Kingdom. If the property is held in a company controlled by a local then it is possible for the foreigner to hold an indirect 49% stake.Nord Anglia and NNN have chosen not to pursue this option. Instead, Nord Anglia has acquired a minority stake in the operating company with the remaining shares probably held by a Thai nominee. A nominee typically has control on paper only; effective control and 100% of the economic value of the operating business is likely to be held by the "minority partner", in this case Nord Anglia.  

Pattaya is slowly ridding itself of its sleazy image of go-go bars and older European men looking for younger women. Tourists from Japan, China, South Korea and young Russians are increasingly drawn to the frenetic nightlife, sandy beaches and great food. Pattaya is also a draw for middle class Thais living in Bangkok who want to get away from it all at the weekend and who find the two hour drive easier than the four hour drive to rival Hua Hin. These trends have led to a property development boom in the region with over 40,000 condo units currently under construction. 

British style International Schools are in great demand as middle class Thais seek the best education for their children. The growing "farang" population is also adding to the boom in demand for places, these include the children of overseas people  employed in one of the multi-national businesses located in the industrial zone around South Pattaya and ex-pats who have married Thai wives.

Nord Anglia will be joining private schools group Cognita, which already has three schools in Thailand operating under the St Andrews brand, including the St. Andrews International School, Green Valley near Sattahip which is 20 to 30 minutes from Pattaya.  

Equity Strategies has a representative in Thailand able to identify opportunities for our clients interested in the region.

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