Monday 01, October 2018 by Jessica Combes

EGP 1.244 billion IPO of CIRA on Egyptian Exchange concluded


CIRA is the largest private sector integrated educational group in Egypt targeting both higher education and k-12 segments.

EFG Hermes, a leading financial services corporation in frontier emerging markets (FEM), has concluded its advisory to Cairo for Investment & Real Estate Development (CIRA or “the Company”) on its EGP 1.244 billion initial public offering (IPO) on the Egyptian Exchange.

CIRA is the largest integrated provider of educational services in the Egyptian private sector, owning and operating 19 schools with over 24 thousand enrolled students as of 2018. CIRA’s schools operate under three distinct brands, namely Mavericks, Futures and Rising Stars, and offer multiple educational tracks, including British, American, French, German and National curricula.

CIRA caters predominantly to the fragmented middle-income segment, offering premium education at affordable pricing. CIRA is also active in the higher-education segment with its Badr University in Cairo (BUC), which houses nine faculties as of 2018. The university enjoys a fast-growing student body of over 7,600 students and maintains key partnerships and affiliations with more than 25 top global universities.

EFG Hermes acted as Sole Global Coordinator and Bookrunner on the transaction. Shares of CIRA were admitted to trading on the Egyptian Exchange under the stock ticker CIRA.

“We are particularly pleased with this transaction that brings a new, high-growth and underpenetrated sector to the Egyptian capital market through one of Egypt’s largest private sector educational platforms,” said Mostafa Gad, Co-Head of Investment Banking at EFG Hermes. “Egypt’s education space is supported by strong demand and a high growth potential owing to the country’s demographic profile. Meanwhile the sector’s limited players and underinvestment add up to an incredible investment opportunity as illustrated by our ability to build a solid base of diversified investors.”

The IPO saw selling shareholders Social Impact Capital (SIC) alongside other minority shareholders offer 207,259,025 shares or 37.8 per cent of CIRA to institutional and retail investors at an offer price of EGP 6.00 per share. CIRA’s total market capitalization at the start of trading was EGP 3.287 billion. The secondary share sale is to be followed by a closed subscription at the same offer price wherein SIC will inject a portion of the IPO proceeds into the Company by way of capital increase.

Proceeds from the capital increase will be utilized to fund CIRA’s growth strategy, which encompasses both capacity and geographic expansion of its schools, while simultaneously pursuing diversification opportunities particularly in the healthcare space.

“CIRA’s IPO builds on a long tradition of bringing new sectors to the public domain and illustrates our continued role in helping develop regional equity markets,” said Mohamed Ebeid, EFG Hermes’ Co-CEO of the Investment Bank. “Education adds to a roster of firsts by EFG Hermes that includes healthcare and dairy and is testament to our leadership position in Egypt as a capable partner that can package and market new opportunities to quality investors thanks to unmatched market insights and execution knowhow.”

EFG Hermes advised on a string of successful ECM mandates, with 12 closed during the year, including: USD c.40 million rights issue of Cleopatra Hospitals Group; Orange Egypt’s USD c.866 million capital increase; USD c.52 million accelerated equity offering of Orascom Construction on the Nasdaq Dubai; IPO of frontier microfinance lender ASA International on the London Stock Exchange (LSE); USD c.226 million accelerated equity offering of 17 per cent of Humansoft Holding Company K.S.C.P on Boursa Kuwait; and $52 million IPO of the Oman-based Dhofar Generating Company on the Muscat Securities Market

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