Chinese Bidders Read Up on Australia’s Modern Star

(AFR) — It's a private equity-heavy field in the auction for Navis Capital's educational resources company Modern Star.

It is understood Navis Capital and its bankers Luminis Partners and Morgan Stanley ushered a bunch of private equity funds into the second round data room this week, and told them to have binding bids ready by early December.

Up-for-sale Modern Star has attracted a handful of deep-pocketed private equity and trade buyers.

Sources said the private equity players to express interest in the business included global firm Bain Capital, along with China's Fosun, Citic, CDH Investments and Hony Capital, which owns Better Education Group.

There was also Bunzl, which is part of a big global business listed in the United Kingdom and that already operates in Australia.

It looms as an interesting auction, with bidders set a reasonably tight second-round timetable and Navis wanting a signed deal before Christmas.

Much of the second-round diligence is expected to be spent trawling over Modern Star's China business, which operates as Wisdom and accounts for more than 20% of its sales.

Modern Star earlier told potential bidders it expected more than $60 million in earnings before interest, tax, depreciation and amortisation in the 2020 financial year, which would represent a double-digit growth on last year and be consistent with its experience since Navis Capital took the keys in 2014.

It is expected to be worth about $750 million.

This story was originally published by The Australian Financial Review

Contact editor Yang Ge (geyang@caixin.com)