Deutsche Beteiligungs AG gets into private tuition

Management buyout of “Schülerhilfe” / Seventh investment in current financial year

Frankfurt am Main, 8 October 2013. Deutsche Beteiligungs AG (DBAG) has announced that it will invest in ZGS Bildungs GmbH, the largest provider of private tutoring services in Germany and Austria with 1,050 company-owned and franchised centres operating under the name of “Schülerhilfe”. The vendors, financial investors Paragon Partners and Syntegra Capital and the managing partner, signed an agreement to that effect with DBAG Fund VI, a fund advised by Deutsche Beteiligungs AG. DBAG will hold a 14.2 percent stake in Schülerhilfe and invest up to 9.8 million euros. Schülerhilfe’s management will also hold an interest in ZGS Bildungs GmbH. The agreement is subject to regulatory approval.

Schülerhilfe is the seventh new company in the portfolio of Deutsche Beteiligungs AG this current financial year (1 November 2012 to 31 October 2013): following the buyouts of Heytex GmbH, Formel D GmbH and Stephan Machinery GmbH, Schülerhilfe is the fourth transaction in which a majority interest was acquired together with a co-investment fund. Additionally, DBAG provided growth capital alongside the DBAG Expansion Capital Fund in 2012/2013 to three companies, where it holds a minority position.

Schülerhilfe is one of the leading providers of qualified supplementary educational and tutoring services in Germany and Austria. It has a client base of 80,000, most of whom are pupils ranging from 6 to 18 years of age; half of these students are aged 13 to 16. Private tuition is delivered at some 1,050 learning centres. Schülerhilfe itself operates one-third of the centres, and the remaining ones are run by independent franchisees. Schülerhilfe is Germany’s third-largest franchise system. In 2012, Schülerhilfe recorded revenues of nearly 43 million euros stemming from its own centres and franchise fees; its franchisees achieved another 65 million euros in revenues with their learning centres.

In a strongly fragmented market, Schülerhilfe is the largest provider of private tuition in Germany. For almost 40 years, the company has provided personal tutoring in small groups of three to five pupils in all curricula subjects, for all grades and school levels. Qualified instructors and tutors focus individually on each student and help him or her to achieve better outcomes. In addition to tutoring, Schülerhilfe, in its role as an important provider of private educational services, also offers preparatory programmes for examinations and courses during school holidays.

Backed by DBAG and DBAG Fund VI, Schülerhilfe intends to continue to grow in a stable market: “Schülerhilfe will contribute towards further institutionalising the private tutoring market and thereby benefit from intensified educational efforts in the coming years,” said Torsten Grede, Spokesman of the Board of Management of Deutsche Beteiligungs AG, on signing the agreement. Dieter Werkhausen, managing shareowner, added: “Together with our new partner, we want to expand our product portfolio jointly with our dedicated franchisees and at our own locations, for instance, by offering tuition services for adults or blended learning, a formal educational programme that combines the advantages of face-to-face classroom sessions and e-learning.”

On behalf of the former shareowners, Krischan von Moeller, Paragon Partners, commented: “Schülerhilfe rigorously concentrated on enhancing the instructional quality in recent years and impressively helped students achieve better grades, which is why ever more pupils go to the market leader for tuition.”