KKR Invests in Leading Filipino Higher Education Group PHINMA Education

Rhea-AI Summary

KKR has announced its first Global Impact investment in the Philippines with an investment in PHINMA Education. PHINMA Education is a major private higher education group in Southeast Asia, aiming to provide affordable education to underserved youth. KKR's investment comes from its Global Impact Fund II, aligning with the UN's Sustainable Development Goals, specifically SDG 4 (Quality Education). PHINMA will remain the majority shareholder. The investment aims to scale PHINMA's operations and reach more students in the region. The transaction is expected to close in Q3 2024, pending regulatory approval.

Positive

• Investment from KKR to scale PHINMA Education's operations.
• PHINMA remains the majority shareholder, maintaining control.
• Alignment with UN's Sustainable Development Goals, specifically SDG 4.
• PHINMA Education serves around 150,000 students across the Philippines and Indonesia.
• KKR's investment will enhance PHINMA's ability to enter new markets.
• Transaction expected to close in Q3 2024, showing confidence in timely completion.

Negative

• Pending regulatory approval from the Philippine Competition Commission could delay the transaction.
• No specific financial details of the investment disclosed, creating uncertainty about its scale.

Insights

Financial Analyst

KKR’s investment in PHINMA Education signifies an important milestone for both firms. For KKR, this marks their first Global Impact investment in the Philippines, which is a part of their strategy to support businesses contributing to the United Nations Sustainable Development Goals (SDGs). This could potentially attract more attention to KKR's Global Impact Fund II, emphasizing their commitment to sustainability and societal impact.

From a financial standpoint, this investment provides PHINMA Education with the capital needed to expand and improve operations. The influx of funds from KKR could help PHINMA develop new campuses, enhance educational programs and potentially increase enrollment numbers. Financially, this could mean higher revenue streams in the future if the investment is aptly utilized for growth.

Investors should note that the closing of the transaction by Q3 2024 is pending the approval of the Philippine Competition Commission. This regulatory step is crucial, as any delays or disapprovals could impact the timeline and anticipated benefits.

Market Research Analyst

PHINMA Education's focus on providing affordable and quality education aligns with global trends towards inclusive education. This strategic move by KKR could help PHINMA scale its operations not just within the Philippines, but also in Southeast Asia. The investment resonates with the growing demand for accessible education in developing regions, potentially increasing PHINMA's market share.

KKR’s expertise and previous investments in similar educational ventures globally indicate a well-thought-out strategy. Given the portfolio that includes companies like Education Perfect and Graduation Alliance, KKR brings a wealth of experience and strategic frameworks that could be pivotal for PHINMA’s expansion.

For retail investors, the potential long-term growth in PHINMA Education’s reach and improvement in educational infrastructure could bolster confidence in the company’s stability and future profitability.

Educational Consultant

KKR’s investment aligns with PHINMA Education’s mission to provide inclusive, affordable education. This partnership could result in enhanced curriculum offerings, better infrastructure and more resources for the students, which directly improve educational outcomes.

PHINMA’s aim to address the needs of underserved youth by making education more accessible is commendable. The additional capital and strategic advice from KKR may help PHINMA address existing challenges, such as dropout rates and educational quality, more effectively.

Retail investors should consider the social impact aspect of this investment. A company committed to improving education quality and accessibility can not only achieve financial returns but also create positive societal change. This dual impact can be attractive to investors looking for more than just economic returns.

Transaction marks KKR’s first Global Impact investment in the Philippines

MAKATI, Philippines--(BUSINESS WIRE)-- KKR, a leading global investment firm, and PHINMA Education Holdings, Inc. (‘PHINMA Education’ or the ‘Company’), a leading private higher education group and the education arm of Filipino conglomerate PHINMA Corporation, today announced the signing of definitive agreements under which funds managed by KKR will invest in PHINMA Education, with participation from existing shareholder Kaizenvest. PHINMA Corporation will remain the majority shareholder in PHINMA Education.

Established in 2004, PHINMA Education seeks to provide quality, affordable tertiary education to underserved youth, equipping them with professional and vocational training that supports gainful employment. Guided by PHINMA’s mission to ‘Make Lives Better Through Education,’ it is one of the largest private higher education groups in Southeast Asia, serving around 150,000 students through its fast-growing network of colleges and universities, including nine in the Philippines and one in Indonesia.

KKR is investing in PHINMA Education from its Global Impact Fund II, which targets companies whose core business contributes meaningfully towards one or more of the United Nations Sustainable Development Goals (SDGs). PHINMA Education’s mission directly contributes toward SDG 4 (Quality Education).

George Aitken, Managing Director and Head of Global Impact for Asia Pacific at KKR, said, “PHINMA Education’s mission of delivering quality, affordable education to underserved communities aligns strongly with our Global Impact strategy. We will look to leverage KKR’s deep experience investing in education companies globally to support the management team’s vision to scale the company and become a leading education platform across Southeast Asia.”

Ramon R. del Rosario, Jr., Chairman and Chief Executive Officer of PHINMA Corporation, said, “When PHINMA first entered the education business two decades ago, we wanted to help improve the lives of young Filipinos in need and in turn, their families. Our commitment to this mission remains steadfast to this day. This collaboration between PHINMA Education and KKR, a like-minded strategic partner, puts us in a better position to serve and uplift the youth of the Philippines and Southeast Asia.”

Dr. Chito B. Salazar, President and Chief Executive Officer, PHINMA Education, added, “While our network has grown significantly over time, there continues to be so many more prospective students to reach, existing students to help keep in school and so much more to do to make college education more accessible to those who need it most. We are fortunate, therefore, to have an investor of KKR’s quality to help us make the lives of the underserved youth in Southeast Asia better. Their investment will support our ability to scale our systems, enter new markets, and empower our students to achieve the future they want and deserve.”

PHINMA Education marks the latest education and workforce development investment by KKR Global Impact, in addition to: EQuest Education, an education group in Vietnam with offerings covering K-12, edtech and vocational training; Education Perfect, a leading learning, assessment, and analytics platform in Australia and New Zealand; Graduation Alliance, which works with students of all ages through partnerships with educators, government agencies, community leaders, and employers to provide versatile pathways to graduation and employment in the United States; Lightcast, a provider of labor market analytics software that delivers real-time data and planning tools to educators in the United States; and Master Distancia, a leading vocational education provider in Spain, Portugal and Italy.

The transaction is expected to close in the third quarter of 2024, subject to approval of the Philippine Competition Commission.

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About PHINMA Education

PHINMA Education Holdings, Inc. part of PHINMA Corporation, started operating in the education services sector in 2004 through the acquisition of PHINMA Araullo University in Nueva Ecija. It has since expanded its presence across the Philippines, serving more than 150,000 students across a school network which includes: PHINMA Cagayan de Oro College, PHINMA University of Pangasinan, PHINMA University of Iloilo, Southwestern University PHINMA in Cebu City, PHINMA Saint Jude College in Manila, PHINMA Republican College in Quezon City, PHINMA Rizal College of Laguna, and PHINMA Union College of Laguna. It also aims to expand across Southeast Asia beginning with Horizon Education in Indonesia. For more information, please visit: https://www.phinma.edu.ph.

About KKR

KKR is a leading global investment firm that offers alternative asset management as well as capital markets and insurance solutions. KKR aims to generate attractive investment returns by following a patient and disciplined investment approach, employing world-class people, and supporting growth in its portfolio companies and communities. KKR sponsors investment funds that invest in private equity, credit and real assets and has strategic partners that manage hedge funds. KKR’s insurance subsidiaries offer retirement, life and reinsurance products under the management of Global Atlantic Financial Group. References to KKR’s investments may include the activities of its sponsored funds and insurance subsidiaries. For additional information about KKR & Co. Inc. (NYSE: KKR), please visit KKR’s website at www.kkr.com. For additional information about Global Atlantic Financial Group, please visit Global Atlantic Financial Group’s website at www.globalatlantic.com.

About PHINMA Corporation

PHINMA Corporation is a Filipino-owned conglomerate that seeks to build the nation through successfully run businesses that make lives better for nearly 70 years now. The Group provides communities in the Philippines and beyond the essentials to a dignified life through its education, construction materials, property development, and hospitality businesses. As it champions using business as a force for good, PHINMA believes in mutually serving the needs of society and the aspirations of shareholders. For more information about PHINMA Corporation, please visit www.phinma.com.ph.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240520933429/en/

Media

For KKR Asia Pacific

Wei Jun Ong

+65 6922 5813

WeiJun.Ong@kkr.com

For PHINMA Education

Rosie Ramirez

+63 905 253 5719

maramirez@phinmaed.com

For PHINMA Corporation

Patrice Manuel

+63 977 347 5346

plmanuel@phinma.com.ph

Source: KKR

FAQ

What is the nature of KKR's investment in PHINMA Education?

KKR has invested in PHINMA Education through its Global Impact Fund II, focusing on providing affordable education to underserved youth.

When is the transaction between KKR and PHINMA Education expected to close?

The transaction is expected to close in the third quarter of 2024, pending approval from the Philippine Competition Commission.

How does PHINMA Education contribute to the UN's Sustainable Development Goals?

PHINMA Education's mission directly contributes to SDG 4 (Quality Education) by providing affordable education to underserved communities.

How many students does PHINMA Education currently serve?

PHINMA Education serves approximately 150,000 students across its network of colleges and universities in the Philippines and Indonesia.

Will PHINMA remain a shareholder in PHINMA Education after KKR's investment?

Yes, PHINMA will remain the majority shareholder in PHINMA Education even after KKR's investment.