Blackstone, Fajr to Foray into Dubai with 20% GEMS Stake Buy

The Blackstone Group L.P. BX is presently keen on making an odyssey into the Middle East. The New York-based private equity firm, per a Bloomberg report, is in advanced talks to close a deal to acquire a minority stake in GEMS Education, an international education company headquartered in Dubai, UAE. Blackstone has teamed up with Fajr Capital, the sovereign-backed investment firm with headquarters in the Dubai International Finance Centre, to buy stakes in GEMS.

Blackstone will likely acquire 20% stake in GEMS for around $350 million through its Blackstone Tactical Opportunities division. Formal deal is expected to be announced in a couple of weeks.

GEMS, with over 100 schools spread across 14 countries, is mulling over raising funds by selling one-fourth of its stake, so as to keep the expansion momentum going, as announced by its Chief Operating Officer, Dino Sunny Varkey in 2013. Notably, the company has employed Zurich, Switzerland-based Credit Suisse Group AG CS to guide it through the stake divestiture.

Improving market situations in the Middle East have turned it into a lucrative destination for many private equity firms like Blackstone. Notably, Kohlberg Kravis Roberts & Co. L.P. KKR has joined hands with CVC Capital Partners Ltd., to bid for Kuwait Food Co., the operator of KFC and Pizza Hut food chains in the Middle East and North Africa.

Currently, Blackstone holds a Zacks Rank #2 (Buy). Another investment manager worth considering is Cohen & Steers Inc. CNS with a Zacks Rank #1 (Strong Buy).