A division of the World Bank Group announced Wednesday that it has invested $150 million in Laureate Education Inc., giving the international development organization a small stake in the Baltimore-based global higher education company.
"It's an incredibly strong endorsement for the company," said Douglas L. Becker, Laureate's chairman and CEO, of the investment by the International Finance Corp. and its affiliate, the IFC African, Latin American and Caribbean Fund.
With annual revenue of about $4 billion, Laureate does not need the money but is eager to have the backing of an investor led by members of international governments, he said.
Laureate educates more than 750,000 students in 29 countries through its network of more than 65 Laureate International Universities.
The $150 million — the IFC's largest single education investment to date — gives the IFC less than a 5 percent stake in the company.
So far, the IFC has invested more than $550 million in education in developing countries. About 25 percent of the IFC's annual investments are for equity, not loans, said Damian Olive, an IFC principal investment officer.
The IFC has previously supported Laureate's institutions, he said, and is looking forward to expanding their work together. "What we hope to build here … is really a long-term partnership," Olive said.
Laureate is focused on expanding affordable, career-creating higher education in emerging countries and often deals with governments in its work, Becker said. Having a stamp of approval from the IFC, which has "incredibly high standards" for its investments because it can only invest in companies that will help expand emerging economies, will help the company earn officials' trust, he said.
Laureate wants the countries where it operates to see its institutions as a mission-driven collective of serious educators, he said.
"They can't just see us as a business," Becker said. "We operate universities all over the world. As a result, there's a very strong social mission to what we do."
Laureate's institutions are geared toward occupational training, in fields such as education, medicine, art and design, and hospitality. Laureate has expanded primarily by acquiring existing schools.
For instance, Laureate operates the recently founded Higher Institute for Power and Water Technologies in Saudi Arabia with an industrial group. The institution was "launched by the government of Saudi Arabia to meet the increasing demand for Saudi nationals in the power and water industry," according to Laureate.
"What we're looking for is educational institutions that are relevant to the job market," Olive said. That makes working with Laureate a natural fit, he said.
The IFC, Olive said, would like to see Laureate expand its operations in the Middle East and Africa. Right now, Laureate's outposts in those regions are in Morocco, Turkey, Cyprus and Saudi Arabia.
"There's a lot of opportunity for us to expand in Africa in general," said Becker, adding that there is still room for growth in Latin America and Asia.
Laureate employs about 70,000 people globally and roughly 1,300 in metropolitan Baltimore. In addition to its international schools, Laureate operates Walden University, a U.S.-based online institution.
The company, which started out as part of Sylvan Learning Systems Inc., used to be publicly traded. An investment group took the company private in 2007 in a buyout valued at more than $3 billion.
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