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Malaysia's Navis begins A$800m sale of education supplier - sources

[SYDNEY] Malaysian private equity firm Navis Capital Partners has began a sale process for Modern Star, the Australian education supplier it bought in 2014, seeking over A$800 million (S$745.2 million) for the business, two sources told Reuters.

The firm and its advisers are seeking indicative bids for the company, which sells education material to early childhood centres and schools in Australia, China and Singapore, by Oct. 9, one of the sources said, declining to be named because the information was private.

Kuala Lumpur-based Navis acquired Modern Star Pty in 2014 for an undisclosed sum in a deal valuing it at up to A$250 million.

Modern Star has made several acquisitions since then, including its 2016 purchase of Wisdom, a China-based provider of educational equipment and furniture to the kindergarten sector, according to its website.

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According to the sources, close to one fifth of the over A$60 million in earnings before interest, tax, appreciation and amortisation (EBITDA) for the year ending June 2019 was derived from its operations in China.

The Malaysian firm has received interest from other Australian and offshore private equity firms, particularly those with an Asian-growth focus, they said.

The business has delivered double-digit earnings growth for the last five years, and because of its growth prospects, the business is expected to be sold for well over 13 times EBITDA, the sources added.

A spokesman for Modern Star did not immediately return an email seeking comment.