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Carlyle Invests US$20 Million in NeWorld Education Group; Private Language Institute to Expand in China


Beijing – Global private equity firm The Carlyle Group today announced its US$20 million investment in NeWorld Education Group, a language institute specializing in Japanese training in China. The investment, funded by Carlyle Asia Growth Partners Group (CAGP), will fuel NeWorld’s nationwide expansion in three main business lines. Further financial details of the transaction were not disclosed. Today also marks the inauguration of three NeWorld schools in Beijing - NeWorld Training Center, Sakura Japanese School and New Baby. This represents NeWorld’s official entry into Beijing for its entire range of businesses and a significant broadening of its footprint in China.

China has a large and rapidly growing education market that is powered by economic expansion, rising individual disposable income, and growing importance of language proficiency in career development. Total education expenditure reached US$95 billion in 2004, up 16.7% from US$82 billion in 2003 . Intensive job competition drives the demand for continuing education. As China integrates quickly with global economies, foreign language skills become significant advantages for job seekers, with English and Japanese as the two most popular foreign languages.

Seizing such huge opportunities, NeWorld has developed a significant presence in Japanese language training with a network of 65 schools in 13 Chinese cities in just 10 years. It offers premium language classes in prime locations from conversational and business Japanese to preparation for standardized Japanese language test (JLPT) 2. It has more than 30% of the Japanese language training market in Shanghai and 5% nationwide. One in three JLPT test participants in Shanghai received training from NeWorld. Its new line of “Sakura” schools offers interactive conversational Japanese tutorials by native speaking tutors.

With its success in Japanese teaching, NeWorld branched out into children’s English and high-end Mandarin for expatriates in China. Both are premium segments showing amazing growth rates. NeWorld’s 14 “Baby Schools” cater to the burgeoning middle class and their increased spending on children’s English tutorials. Another 7 “I-Mandarin” schools target high earning expatriates.

“The partnership with Carlyle represents another significant milestone for NeWorld; it demonstrates a strong acknowledgement of our achievement and quality of education built upon a ‘learning to apply’ philosophy,” said Mr. Wei Xu, NeWorld’s Founder and President. “Carlyle’s investment will support our strong push in developing new business lines and geographic expansion to more than 120 schools across 18 to 20 Chinese cities by 2009.”
Mr. Wayne Tsou, Managing Director and Head of CAGP, said, “This is our group’s second investment in the education sector, following a Korean transaction we closed in May 2007. We like the resilient nature of the education market, which often grows regardless of economic cycles. The segments NeWorld targets are estimated to be more than US$1 billion in aggregation and are growing at 30% per annum. As a strategic investor, we will leverage our ample resources and global network to help NeWorld capture these growth opportunities. Our Japan team has already made contributions to broadening NeWorld’s relationships with Japanese organizations and relevant authorities.”

CAGP, one of the region’s largest growth capital platforms, manages three funds with an aggregate capital of more than US$1 billion. The group seeks out promising high-growth private companies with differentiating but proven business models across industries in China, India, Japan and Korea. Since closing in June 2006 Carlyle Asia Growth Partners III, a US$680 million fund, has already committed nearly US$300 million to support 13 companies in seven major sectors. Chinese companies account for more than half of the committed capital and portfolio of CAGP III.


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