Deal of The Month by Finance Monthly

The Munich-based AURELIUS Group is acquiring AKAD Bildungsgesellschaft mbH and AKAD Kolleg für Erwachsenenbildung, a takeover that is consistent with AURELIUS' commitment to expand in the area of private education. Finance Monthly spoke to IEG to learn more.

What more can you tell me about AURELIUS acquiring AKAD University?

First of all, I think that Aurelius is entering a highly attractive segment of the private education market: distance and online education, respectively, will further gain in importance as they offer students a degree of flexibility and focussed education that is hard to achieve in a traditional, only campus-based learning environment. Students can keep their job, do not have to relocate and as online seminars gain in importance, the need to travel on weekends to attend seminars will more and more be reduced. Further, private education providers compete in many areas against public universities, i.e. institutions that often do not have sufficient resources and financial means to offer a learning environment and a level of service comparable to private institutions. Based on these structural advantages and an economy that is more and more based on education and life-long-learning, I was not surprised that AKAD attracted a lot of interest from both financial and strategic investors.

What was your involvement with the deal?

We have been the financial advisor of Franz Cornelsen Group, the leading German-based education group, since 2012, when they decided to focus their investments more narrowly on the core K-12 business and other publishing-realted areas. This means that we were brought in relatively early as advisor taking care of the complete sale process for AKAD University.

Our involvement was very deep right from the start of the preparation of the sale until closing. Probably a decisive factor here was that we were relatively sure right from the beginning that AKAD Univeristy would attract sufficient investor interest for a successful sale. THis was very helpful later on in the process when our client saw that we were right in our initial assessment. Last but not least, we had a very active role in the structuring of the transaction and during contract negotiations.

Did you face any difficulties along the way?

At some point, my optimistic view of the sale was not shared by everybody, which was no surprise to me. Being persistent and at the end of the day being able to deliver and keep your promises is the most convincing way to overcome such difficulties. This is not always possible, but in our case it was!

What does this acquisition mean for the future of AURELIUS abd AKAD University?

I think that following the acquisition of AKAD University, Aurelius now really has become a relevant player in the private German education market. Since 2012 they have already been the owner of Studienkreis, the market-leading tutoring franchise basically focussing on the K-12 segment. I think that this will be positive for the sector as a whole which often lacked the attention and awareness that it would deserve.

For AKAD University, the transaction offers the opportunity to return to profitable growth as soon as possible and to benefit from AURELIUS' competence in optimizing businesses. AKAD University has an excellent brand and as a pioneer in distance-learning in Germany, it is best positioned to become the leading private, online university in Germany.

Is there anything else you would like to add?

Being enthusiastic about what you do and being persistent can help to overcome difficult situations - also in M&A.

The article was originally posted in Finance Monthly in June 2014.