Croydon (Parliament Politics Magazine) – Cognita, owner of Croydon’s Cumnor House prep schools, is exploring a £5bn global sale, attracting interest from major private equity firms.
GENE BRODIE, our education correspondent, discusses how private equity firms are circling a lucrative private school industry.
According to reports, the corporation that owns the Cumnor House prep schools and nurseries in Croydon is thinking of selling their international operations for £5 billion.
The Times newspaper reported the story Wednesday, right before Cumnor House’s yearly open days for parents of potential customers.
The main firm, Cognita, runs over 100 fee-paying schools in 17 different countries.
Cumnor House has benefited from substantial investment and renovation since joining Cognita in 2010, improving its amenities and standing. The sale might result in new ownership, new funding, and new growth-oriented strategy.
The chance to realize a sizable financial return in the face of robust market demand for private education assets—supported by interest from major private equity firms looking for steady, long-term investments—is what motivates the choice to sell.
“We are proud to be part of this community and actively help to shape it,”
the Cumnor House schools say of Cognita on their website.
“Each school within the Cognita family preserves its distinct character and remains deeply rooted in its local community. Crucially, these diverse experiences across the world foster inspiration, shared support, and growth opportunities for every school within our group.”
And they say,
“By being part of the Cognita family, we open the door to a global community… that’s rich in knowledge, opportunities and best practices, ensuring every child gets an education that’s, quite literally, world class.”
But that could be about to change, according to The Times.
“Private equity giants are circling one of the biggest owners of private schools in the UK, as its owners tee up a sale that could value the business at £5billion,”
the report says.
The late Sir Chris Woodhead, the former chief inspector of schools for the government, co-founded Cognita, which is reportedly being considered for purchase by private equity firms Permira, CVC, and Blackstone.
The four Cumnor House schools are among the 39 schools owned by Cognita nationwide.
Cumnor House Boys’ Prep (for children aged four to thirteen) was established in 1910 but moved to its own building on Pampisford Road in South Croydon in 1931; Cumnor House Girls’ Prep (for children aged four to eleven) was founded in 2010 and is located on Woodcote Lane in Purley; there is also a Purley kindergarten and pre-school (for children aged two to four) on the Webb Estate (where else?); and their South Croydon kindergarten and pre-school, which appears out over the boys’ prep’s expansive playing fields on Pampisford Road.
The Independent Schools Council estimates that Cumnor House has 50 girls and 340 boys, with parents paying between £9,500 and £17,238 in annual tuition (VAT excluded).
In 2010, Cumnor House was purchased by Cognita.
In its annual report released last year, Cognita stated that due to its extensive geographic reach, it believes the risk to its overall company of the Labour government’s decision to impose VAT on private schools is minimal.
In 2004, Woodhead and the private equity firm Bregal created Cognita. In 2013, Viridor, an incinerator operator, was acquired by KKR, another private equity firm. In 2018, the business was sold for £2 billion to Jacobs, an investor located in Zurich that Swiss billionaire Klaus Jacobs founded.
The Times says:
“Jacobs looks set to cash in on Cognita at a time when valuations in private and international school companies are rising. Some investors are attracted by the sector because it offers relatively reliable revenues even when the global economy is uncertain, because children still need to be educated and wealthy parents are willing to pay their fees.”
According to the publication, Cognita currently makes about £260 million annually before interest, taxes, and other expenses; this accounts for the company’s hefty multibillion-dollar valuation.
What are the main reasons behind the decision to sell Cumnor House prep schools in Croydon?
Cumnor House’s international parent company, Cognita, is apparently thinking about selling the property for almost £5 billion. Strong, comparatively steady profits from private education—which is still in demand despite economic instability because education is crucial and many affluent parents continue to pay fees—are the key driver of this high valuation. Private schools are viewed by investors as a lucrative industry.
Due to the steady revenue streams and expansion prospects of global private school organizations like Cognita, major private equity firms like Permira, CVC, and Blackstone are circling as possible purchasers.
In 2018, the Zurich-based investment vehicle Jacobs paid £2 billion to acquire Cognita. Jacobs would be able to profit from a notable boost in valuation as a result of the current transaction, which reflects growing investor interest in educational assets.