LONDON: GEMS Education has agreed to buy the Ma’arif Education Group, the largest private school operator in the Kingdom. The UAE-based group has established a joint venture with Hassana Investment Co., the investment arm of Saudi Arabia’s General Organization for Social Insurance (GOSI), to build more than 50 schools across the country.
Ma’arif schools consist of both national and international campuses and have over 22,000 students enrolled. GEMS did not disclose the value of the deal and was not immediately available for comment.
“The Ma’arif acquisition of 14 schools is an ideal platform from which to grow, and we are incredibly excited about further expansion in the country,” said Dino Varkey, CEO of GEMS Education. “Saudi Arabia is one of the most attractive growth markets for GEMS Education, and we are committed to supporting the education sector in the country.”
The deal coincides with a major government drive to boost education standards within the Kingdom as part of the country’s Vision 2030 blueprint for economic and social reform. Education is seen as a key first step in developing a knowledge-based economy, and adding high-value jobs.
“Saudi Arabia spends 8.8 percent of its gross domestic product on education, against a global average of 4.6 percent,” Christos Cabolis, chief economist and head of operations at the IMD Business School’s World Competitiveness Center, told Arab News earlier this week. “The expectation for the future must be very good.”
GEMS is one of the world’s biggest private school operators, and has grown rapidly in its home market of the UAE. It educates over 124,000 students across the Middle East and North Africa. However, a regional economic slowdown and the departure of many high-paid expatriates from the Gulf states over the last five years has hit education groups hard, increasing competition for students to fill large new campuses.
School building requires major upfront investment to acquire land, pay contractors and hire teachers, and it often takes years to recoup initial investment.
Saad Al-Fadly, CEO of Hassana Investment Co., said that the joint venture with GEMS would tap into its track record in education with Hassana’s strengths as a Saudi institutional investor.