Bodhi Tree picks up strategic stake in coaching institute ALLEN for $600 million

Bodhi Tree Systems, a platform of James Murdoch’s Lupa Systems and Uday Shankar, former president of The Walt Disney Company, Asia Pacific, has picked up a strategic stake in ALLEN Career Institute, a premier coaching institute, for $600 million.

A statement issued by the two entities, however, did not mention the quantum of the stake purchase. The transaction comes barely a few days after Bodhi Tree announced leading a fund-raise with a consortium of investors to put in Rs 13,500 crore in Viacom18, to jointly build India’s leading entertainment platform.

The edtech sector has been seeing a rash of deals in recent times, the highlight being Byju’s decision to acquire Aakash Educational Services in April last year. The cash-and-stock deal was closed at almost $1 billion, making it one of the most expensive deals in the edtech space.

ALLEN, the statement said, is an education powerhouse with an “unparalleled track record of success in the world’s most competitive college entrance examinations and Olympiads”. It has a pan-India footprint with a growing presence in West Asia through 138 classroom centres in 46 cities. The partnership with Bodhi Tree will build on the test-prep offering and deliver at-scale positive impact for millions of students in test-prep and K12 segments, using technology as the core driver of value, the statement said.

Bodhi Tree, the companies said, will leverage its founders’ shared track record of building iconic consumer businesses to build ALLEN into a world-class digital education business of the future. Qatar Investment Authority, the sovereign wealth fund of the State of Qatar, is an investor in Bodhi Tree Systems.

“Education is a critical consumer need, driven by its deeply transformative impact on lives and livelihoods of consumers,” Murdoch and Shankar said. “We believe that education is on the cusp of a technology-led renaissance that will fundamentally alter how education is imparted and will increase its efficacy.”

Founded by Rajesh Maheshwari in 1988, ALLEN is a test-prep brand that has coached over 2.5 million students. Senior-most director Govind Maheshwari said, “Our decision to enter into this strategic partnership with Bodhi Tree is founded on shared values, principles and an aligned vision of creating societal impact at scale through education globally.”

ALLEN’s director Naveen Maheshwari said the  partnership will take the company’s pedagogy, caring system and values to a wide student community which was not able to associate with ALLEN otherwise due to physical constraints.

Chairman-designate of the new board, Brajesh Maheshwari, said most edtech products services in the market are not solving for the needs of a student. “With ALLEN’s time-tested pedagogy and Bodhi Tree’s track record in technology, the 2 T’s — ‘teaching’ and ‘technology’ — will now come together to finally solve the problems of millions of students of outcome-driven learning in a tech-enabled environment.”

The transaction is expected to close within three months and is subject to closing conditions and requisite approvals. EY acted as the exclusive financial advisor. Cyril Amarchand Mangaldas provided legal advisory and documentation support to ALLEN. EY provided due diligence services to Bodhi Tree. AZB & Partners were the legal advisors to Bodhi Tree.