Sofina Cognita €6bn deal collapse impacts Sofina's 13.4% stake
A €6bn private equity deal for Cognita, a UK-based private school operator and one of Sofina's key holdings, is on the brink of collapse. Jacobs Capital, the majority shareholder, aimed to sell a significant stake in Cognita in Apr'25. The stake sale to the primary bidders, Blackstone and CVC, is now unlikely to proceed, according to the Financial Times. The deal's failure stems from a valuation mismatch and the UK's new 20% VAT on private school fees, which has introduced market uncertainty. In FY24, Cognita's EBITDA surpassed £260m (€304.4m), supporting a potential valuation of €5.5bn-€6.1bn at an 18-20x EV/EBITDA multiple, consistent with peer Nord Anglia Education's $14.5bn valuation. We now revise this to last year's valuation of €5.0bn. Sofina's 13.4% minority stake is valued at €496.5m (down from €630.6m) in our model, resulting in a 1.2% decrease in our target NAVps from €329.8 to €325.6. We reiterate our BUY rating and €315 TP.SOFINA is an investment company whose portfolio consists of shareholdings in various companies. Co. manages a portfolio of long-term and short-term investments. Its portfolio comprises investments in companies which are active in sectors such as: Energy and Services (GDF Suez, Suez Environnement, bioMerieux and Exmar); Retail (Colruyt, Delhaize); Consumer goods (Danone, Rapala, B & W Group, and Chapoutier); Satellite operators (SES); Finance Companies (Eurazeo, Caledonia, Luxempart, RAB Capital); Industry (Petit Forestier, Landis + Gyr, Carbone Lorraine and Deceuninck) and Alternative assets (Private equity, Hedge funds).
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