More Mergers in Brazil
Estácio Participações announced it would buy part of the group Uniseb for R$ 615.3 millions ($280 million). Estácio Participações currently operates 77 campuses in Brazil.
Since writing my previous post on the mergers of large for-profit universities in Brazil, new ventures have been announced in this rapidly changing scenario that represent additional agglomeration and a further reduction in the number of the players in the market.
On September 12, 2013, the private company, Estácio Participações, announced that they would buy part of the group Uniseb (from Ribeirão Preto, state of São Paulo) for R$ 615.3 millions (around 280 million US dollars). Estácio Participações currently operates 77 campuses in 20 different states and in the second trimester of 2013 reported a net profit of around 47 million Brazilian reais (approximately 21 million dollars). Estácio, already enrolls approximately 335 thousand undergraduate students throughout Brazil. The purchase price was approximately R$ 16 thousand (US 7.4 thousand) per student multiplied by 37.8 thousand students (33.4 enrolled in distance education). This transaction will extend Estácio’s holdings in distance education courses, undergaduate and graduation courses. If approved by the Conselho Administrativo de Defesa Econômica (Cade) or Economic Defense Administrative Council, this will give Estacio a major share of distance education in the important São Paulo state.
Estácio’s acquisition followed another important merger announced a few weeks earlier. The North-American Laureate Group purchased Faculdades Metropolitanas Unidas (FMU), the Faculdades Integradas de São Paulo (FISP) and the University Center Fiam-Faam, totalizing around 40 buildings just in the city of São Paulo. Laureate’s investment approximated R$ 1 billion (around US$ 450 millions). This is the 12th acquisition by the Laureate Group in Brazil since entering the Brazilian market in 2005.
Market analysts indicate that this is part of a consolidation in the higher education sector in Brazil, led by private equity funds. The questions raised in the previous post remain the same. Although I am briefly describing rather complex shifts in the higher education scenario in Brazilian, these trends are happening (or will in the future) in other countries, and will play out differently in each culture and regulatory environment. It is a trend to be watched carefully.
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