KKR investing in Phinma’s education unit

MANILA, Philippines —  The Phinma Group of businessman Ramon del Rosario Jr. is taking in a new strategic partner in its education arm Phinma Education Holdings Inc.

Definitive agreements were signed under which funds managed by KKR will invest in Phinma Education, with participation from existing shareholder Kaizenvest.

The transaction involved the signing of an investment agreement between Phinma Education and Phoenix Investments II Pte. Ltd, an investment vehicle of funds managed by KKR, and Rise Edu Pte. Ltd., an investment vehicle of funds managed by education-focused private equity fund Kaizenvest.

Phinma said the investment agreement includes the issuance of newly issued shares by Phinma Education amounting to P4.5 billion.

KKR will be entitled to three members of the board out of the 11 directors of Phinma Education as part of the investment agreement.

Funds managed by KKR have likewise entered into an agreement to acquire all the shares in the Phinma Education owned, directly or indirectly, by Asian Development Bank (ADB), Nederlandse Financierings- Maatschappij voor Ontwikkelingslanden N.V. (FMO) and Kaizen Private Equity II Pte. Ltd. (Kaizenvest II), all of which invested in the company in 2019.

Upon the completion of the transactions, funds managed by KKR and Kaizenvest will respectively own, directly or indirectly, a 30.67 percent and 3.73 percent stake in the Phinma Education.

ADB, FMO and Kaizenvest II, meanwhile, will no longer be shareholders of the company.

“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,” said Del Rosario, chairman and CEO of Phinma.

“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,” he said.

KKR is investing in Phinma Education from its Global Impact Fund II, which targets companies whose core business contributes meaningfully toward one or more of the United Nations Sustainable Development Goals.

“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,” KKR managing director and head of global impact for Asia Pacific George Aitken said.

Phinma, which currently owns 75.01 percent of Phinma Education, will remain as the majority shareholder of the company upon closing of the transactions.

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.

The company 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.

“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,” Phiinma Education president and chief executive officer Chito Salazar said.