The Wall Street Journal recently reported the acquisition of two education companies in India. With an annual growth rate at over 15%, the sector is expected to grow even faster over the next 10 years. As companies expand their services and increase in size, they could have a positive impact on millions of who children who are currently unable to access quality education.
MUMBAI — Two education companies announced acquisitions on Tuesday, as companies look to expand in India’s booming education sector.
Core Projects and Technologies Ltd., an education solutions provider, has acquired ITN Mark Education Ltd, a U.K.-based provider of teachers and teaching assistants, for $25 million. DMC Education Ltd. acquired Kolkata-based education consulting firm Plansteps for 450 million rupees ($10 million).
India’s education sector is growing at a rate of 15% to 20% annually among schools, and still faster at 25% to 30% in the pre-kindergarten and vocational studies space. It is expected to grow much faster over the next 10 years, said Narayanan Ramaswamy, executive director of education at consulting firm KPMG.
Companies are increasingly looking to raise funds, make acquisitions and forge partnerships to increase in size and scale.
“The question is whether you would want to build up the capabilities on your own or through acquisition,” Mr. Ramaswamy said.
“The kind of returns the sector offers is high. The risk-adjusted returns now look better than before, and hence there is lot of interest from domestic as well as foreign players.”
Private equity companies invested a total of $54 million in local education services providers in 2010. The one such deal earlier this year was increase of Pearson Plc of the U.K.’s. stake in online tutoring firm TutorVista to 76%.