Bertelsmann buys £430m stake in Afya

Bertelsmann is expanding its footprint in Brazil’s fast-growing education market, buying a major stake in medical company Afya.

The organisation, which owns Penguin Random House, is acquiring a 25% stake and 46% of the voting rights in Afya, the leading provider of medical education and training in Brazil which Bertelsmann helped co-found, for the equivalent of ‚Ǩ500m (£430m). The transaction is pending regulatory approval. Bertelsmann chairman and c.e.o. Thomas Rabe (pictured) called it a deal of "great strategic importance".

Bertelsmann will acquire the shares in Afya from Crescera Educacional II, a fund launched in 2014 by Crescera Capital with Bertelsmann as the main investor. The group intends to further develop Afya together with the founding Esteves family, which holds 24% of the shares and 45% of the voting rights, and the company’s successful management team.

Since 2017 Afya has grown its revenue by an average of 80% per year to ‚Ǩ203m (£174m) in 2020. Based on market capitalisation, it is Brazil’s largest education company focused on the medical field.

Afya caters both to students and to physicians who want to continue their education and is the largest company of its kind in Brazil, working with 430 partner clinics and hospitals. It has branches in 18 states across the South American country.

Rabe (pictured), whose contract was recently extended, said: “The acquisition of the Afya shares is of great strategic importance for Bertelsmann: it strengthens our global position in the market for education and training in the healthcare sector. It also creates another mainstay in Bertelsmann’s education portfolio alongside Relias and Alliant in the US. And it brings us significantly closer to our goal of generating annual revenues of one billion euros with the Bertelsmann Education division in the medium term.”

Shobhna Mohn, executive vive-presidemt of Bertelsmann Investments, said: “Afya was successfully built up in co-operation with Crescera Capital, the founding Esteves family, Afya’s management, and our Bertelsmann investment team in Brazil. In the past few years, Afya has achieved significant double-digit growth every year despite the economic crisis in Brazil and the global pandemic."

He added: "We are excited to make an important contribution to the further development of Bertelsmann’s Group strategy in the areas of education and internationalisation with the acquisition of the Afya stake.”