Altamir - 2018 Registration document

1

Business description and activities

Presentation of the Company

www.inseec.com

1) Business description INSEEC U. 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 U. group now operates 16 schools in France (Paris, Bordeaux, Lyon and Chambery) and abroad (Monaco, London, Geneva, San Francisco and Shanghai), serving approximately 25,000 students. INSEEC U. offers a wide range of programmes ranging from preparation for entrance exams todoctoral degrees. Buildingon its Frenchroots,thegroup’sstrategyistodevelopworld-classeducation and distinctive expertise in five disciplines: (i) management, (ii) engineering, (iii) communication, design and digital marketing, (iv)politicalscienceandinternationalrelations,and(v)luxurygoods, real estate, sports, and wine & spirits. 2) Investment rationale INSEECU. isa leadingfor-profitpost-secondaryeducationprovider in France with several key strengths vis-à-vis competitors: agility and innovation, soundgovernance, cost efficiency, marketing skills, attractive and multi-site campuses, programme diversity and no dependency on subsidies. Corporate governance is sound. Its Grande École is ranked among the top 25 business schools and contributes to brand building and other programmes via a halo effect. INSEECU. also has six other leadingprogrammes (MSc, Sup de Pub, École de Commerce Européenne, 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) Sources of value creation INSEEC U. intends to pursue its two growth objectives: (i) develop the existing corebusiness by fostering further academic excellence and increasing the attractiveness of its schools and (ii) expand market share through new offerings. Programmes are being internationalised and expanded to other countries through new campuses and exchanges with foreign universities.

INSEECU. alsoplans tocrystallisesignificant potential for synergies withLaureate’sFrenchoperations, andfurtheroptimise INSEECU.’s existing cost structure. 4) Achievements Since investment, thegrouphas finishedoptimising itsorganisation and pursued its international expansion by acquiring CREA, a Geneva-basedcommunicationsanddesignschool,launchingluxury brand training in Asia and opening a new campus in San Francisco. In 2015, the Ministry of Higher Education renewed INSEEC’s accreditation as a “Grande Ecole” for four years, contributing to the school’s attractiveness. In July 2016, the group finalised the acquisition of the French subsidiariesofUSgroupLaureate, nearlydoubling insizeasa result, and expanding its offerings in engineering and online training for executive managers. In August 2018, the Company successfully refinanced its debt at favourable terms. 5) Performance Fiveyearsafterourinvestment,INSEECU.isperformingsignificantly better than plan owing to a transformative acquisition (Laureate France), continued innovation and double-digit growth in new enrolments each year. Overthefirsthalfofits2018/19financialyear(FYE30June),INSEEC U.’s revenue increased by 6% to €116.3m. During this period, the company continued to strengthen its leadership through several initiatives:(i)groupingall16schoolsunderthenewbrand,INSEECU. (forINSEECUniversitas);(ii)continuingtheeffortstousethegroup’s real estate more efficiently to create multidisciplinary campuses; (iii) launching a digital transformation project intended to create a unique student experience; and (iv) pooling resources and strengthening governance to create a platform for consolidation. The group expects to generate double-digit growth in EBITDA for the 2018/19 financial year, spurred by double-digit total enrolment growth in September 2018 (25,000 students enroled).

6) Exit An agreement to sell INSEEC U. was signed in March 2019.

DATE OF INVESTMENT

PORTFOLIO AT FAIR VALUE

SECTOR

COUNTRY

RESIDUAL COST

FAIR VALUE

2013

€ 29.2 m €

124.9 m

12.5 %

F R A N C E

26 Registration document ALTAMIR 2018

www.altamir.fr