Phinma gets P4.5B in fresh capital from global investors

MANILA, Philippines — Phinma Education, one of the biggest private education groups in the Philippines and the education arm of Phinma Corp., has secured P4.5 billion in fresh capital for its planned expansion of education offerings in the region.

According to a stock exchange disclosure on Wednesday, Phinma Education Holdings Inc. signed an investment agreement to issue new shares worth P4.5 billion to Phoenix Investments II Pte. Ltd., an investment vehicle managed by global firm KKR Global Impact, and Rise Edu Pte. Ltd., which is managed by Kaizenvest, an education-focused private equity fund with investments scattered across South and Southeast Asia.

AB Capital served as the financial adviser of Phinma education for the transaction. 

KKR has also entered into an agreement to acquire all Phinma Education shares directly or indirectly owned by Asian Development Bank (ADB), Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V. (FMO), and Kaizen Private Equity II Pte. Ltd. (Kaizenvest II).

Following the completion of these transactions, this means KKR will own, directly or indirectly, a 30.67% stake in Phinma Education. Meanwhile, Kaizenvest's stake will be at 3.73%.

Parent firm Phinma Corp., which currently owns 75.01% of its education arm, will remain the majority shareholder.

The deal is expected to close by the third quarter, subject to the approval of Phinma Corp. and conditions. 

Under the investment agreement, KKR gets three seats in the subsidiary's board of directors

KKR will be investing from its Global Impact Fund II, a fund that targets companies whose core business contributes towards one or more of the United Nations Sustainable Development Goals (SDGs).

Led by Phinma Corp. CEO Ramon del Rosario Jr., Phinma Education runs a network of colleges and universities in the Philippines with around 150,000 students. It currently has nine schools in the Philippines and manages one in Indonesia.

“When PHINMA first entered the education business two decades ago, we wanted to help improve the lives of young Filipinos in need and in turn, their families. Our commitment to this mission remains steadfast to this day," Del Rosario said in a statement. 

"This collaboration between PHINMA Education and KKR, a like-minded strategic partner, puts us in a better position to serve and uplift the youth of the Philippines and Southeast Asia," he added.

Phinma Education also recently announced its plans to acquire more schools in the country and expand its presence in Cambodia, Laos and Vietnam.

Chito Salazar, president and CEO of Phinma Education, said that KKR's investment will boost the subsidiary's ability to "scale our systems, enter new markets, and empower our students to achieve the future they want and deserve.”

"While our network has grown significantly over time, there continues to be so many more prospective students to reach, existing students to help keep in school and so much more to do to make college education more accessible to those who need it most," Salazar said.

Since its establishment in 2004 through the acquisition of Araullo University in Nueva Ecija, Phinma Education has expanded its portfolio of higher education institutions. 

It manages Phinma Saint Jude College in Manila, Phinma  Republican College in Quezon City, Phinma Cagayan de Oro College, Phinma University of Pangasinan, Phinma University of Iloilo, Southwestern University Phinma in Cebu City,  Phinma Rizal College of Laguna, Phinma Union College of Laguna and Horizon Education in Indonesia.

In March, the education subsidiary said it had clinched its highest-ever enrollment at 146,546 students in the Philippines and Indonesia for School Year 2023-2024, an 18% increase from the previous school year.