Altamir - Registration Document 2016

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1 FINANCIAL AND LEGAL INFORMATION
Presentation and history of the Company
Sector Country Date
of investment
Residual cost
in €m
Fair value
in €m
% of the portfolio
at fair value
France 2013 42.9 73.6 8.4
1) Business description
Groupe INSEEC is the leading for-profit post-secondary
education provider in France. With the acquisition of the French
activities of the US group Laureate in 2016, the INSEEC group
now operates 17 schools in France (Paris, Bordeaux, Lyon and
Chambery) and abroad (Monaco, London, Geneva, Chicago and
Shanghai), for nearly 21,000 students.
INSEEC offers a wide range of programmes ranging from
preparation for entrance exams to doctoral degrees. Building
on its French roots, the Group’s strategy is to develop world-
class programmes and distinctive expertise in five domains of
education: (i) Luxury and Hospitality, (ii) Wine and Spirits, (iii)
Communication, Design andDigital Marketing, (iv) Engineering
and (v) Online Executive Business Education.
2) Why did we invest?
INSEEC is a leading for-profit post-secondaryeducationprovider
in France with several key strengths vis-à-vis competitors:
agility and innovation in programme development, sound
governance, cost efficiency, marketing skills, attractive and
multi-site campuses, programme diversity and no dependency
on subsidies. Corporate governance is sound, and the group’s
experienced CEO has a successful track record.
Its Grande École programme is ranked among the top 25
business schools and contributes to brand building and other
programmesviaahaloeffect.GroupeINSEECalsohasthreeother
leading programmes (MSc, Sup de Pub andÉcole deCommerce
Européenne), on top of recently acquired programmes, two
business and one engineering (EBS, ESCE and École Centrale
d’Électronique).
Growing in volume and price, and ripe for consolidation, the
for-profit higher education market is attractive and has strong
market intrinsics: counter-cyclicality, barriers to entry, revenue
visibility, no working capital needs, high profitability and high
cash conversion.
3) How do we intend to create value?
INSEEC intends to pursue its growth objectives. It will grow the
existing core business by fostering further academic excellence
and increasing the attractiveness of its schools and will expand
market share through new programme offerings. Programmes
are being internationalised and expanded to other countries
through newcampuses and exchange programmeswith foreign
universities.
INSEECalsoplans tocrystallise significant potential for synergies
withLaureate’s Frenchoperations, and further optimise INSEEC’s
existing cost structure.
4) What has been achieved?
Since investment, the group has finished optimising its
organisation and pursued its international expansion by
acquiring CREA, a Geneva-based communications and design
school, launching a luxury brand trainingprogramme inAsia and
launching a new campus in San Francisco. In 2015, the Ministry
of Higher Education granted a four-year renewal of INSEEC’s
accreditation as a “Grande École”, which contributes to the
school’s attractiveness.
In July 2016, the group finalised the acquisition of the French
subsidiaries of US group Laureate, nearly doubling in size as
a result, and expanding its offerings for engineering training
and online training for executive managers. This significant
acquisition created the uncontested leader in post-secondary
education with 17 schools and 21,000 students.
5) How is it performing?
Three years after our investment, the company is performing in
line with objectives. In the 2015-16 financial year (FYE 30 June
2016), Groupe INSEEC posted a 6% increase in revenue, to
€91.6m, owing to new student enrollment, and a 16% increase
in EBITDA compared with the previous year.
During the first half of the 2016-17 financial year (July-December
2016), revenues stood at €69m, in line with the first half of last
year. The Group is expected to generate double-digit EBITDA
growth in FY2016-17 thanks to top-line growthwith September-
October 2016 new enrollments up 7%, and significant synergies
to be generated from new schools integration.
The valuation of the investment in Groupe INSEEC grew by
€12.4m during the 2016 financial year.
6) How will we crystallise value?
The Group’s asset-light structure translates into a highly cash
generative business model. It has significant potential for
further growth via new programme offerings and international
expansion, which should be very attractive for both financial
and trade buyers.
26 REGISTRATION DOCUMENT 1 ALTAMIR 2016