Chinese Education Co. Raises $103 Million

SHANGHAI (Reuters) – British private equity firm Actis said on Tuesday it had led a consortium investing $103 million in Ambow Education Co Ltd, a Chinese educational services provider that targets middle school students.

The $103 million investment led by Actis, the latest round of private fund-raising for the Beijing-based company, came after a consortium led by Macquarie Group Ltd (MQG.AX: Quote, Profile, Research, Stock Buzz) invested a combined $54 million in Ambow last October.

Ambow, founded in 2000, has a national school network that offers educational services complementing the Chinese national curriculum.

In particular, the firm targets middle school students who aspire eventually to be admitted to Chinese universities, a highly competitive screening that is one of the biggest academic challenges many young Chinese face. “This investment illustrates Actis’s strategy in China – to invest in leading companies in attractive domestic consumption sectors with a capable and passionate professional management team,” said Lim Meng-Ann, head of China for Actis, in a statement.

“We are excited by the huge potential of the Chinese education sector,” Lim added.

China’s education industry thrives in both economic good times and downturns, given the intense competition to get into top schools and land promising jobs. Ambow also offers vocational training.

Late last year, Ambow executives said it planned to list abroad after it received investments from Macquarie and others, according to Chinese media reports.

China’s education market grew to an estimated US$143 billion in 2007, according to the Actis statement.

Last week, Actis announced it had led a $65 million investment in China’s 7 Days Inn Group, part of the mainland’s fast-growing budget hotel industry.