St. George’s University in Grenada has landed a $750 million investment from a group led by Canadian private-equity firm Altas Partners LP and a fund advised by Baring Private Equity Asia, according to a person familiar with the deal.
The new investors will hold a majority stake in the for-profit college, though the original owners will collectively remain the largest single shareholder. The companies declined to share details of the new ownership structure.
The investment underscores the market opportunity for high-quality medical education overseas, as the number of open slots at U.S. schools is dwarfed by the number of applications those schools receive. Last year, according to the Association of American Medical Colleges, just under 42% of the 48,010 applicants to U.S. medical schools enrolled.
The money will help St. George’s, which has programs in medicine and veterinary medicine, expand its global reach, said Chancellor Charles R. Modica. More than two-thirds of the 5,150 students in its four-year M.D. program are U.S. citizens, and almost all of them return to the U.S. for residency programs. Modica said he’s interested in growing the talent pipeline in places like Botswana, South Sudan and parts of Asia.
“We were at a point of recognizing that this could be so much more” than a training ground for U.S. doctors, Modica said. Building capacity for other international students who will then return to their home countries is “chapter two.”
Reuters reported last year that St. George’s was looking to sell itself for upwards of $1 billion, but Modica said the school was never aiming to sell itself outright. “This is my baby,” he said.
He said the funds will go toward scholarships, as well as marketing and outreach to attract future students.
It will also help grow St. George’s network of clinical rotation partners. The school pays about 70 affiliate hospitals to take students for third- and fourth-year clinical rotations, which help pave the way for residency placements. For example, it has a 10-year, $100 million deal for 600 slots at the New York City Health and Hospitals Corp., which runs 11 public hospitals.
St. George’s, founded in 1976, is perhaps best known for playing a part in the U.S.’s 1983 invasion of Grenada; shortly after a Marxist coup on the island nation troops evacuated nearly 1,000 Americans, many of whom were medical students at the university.
Many students who didn’t gain admission to mainland U.S. medical schools pursue degrees in the Caribbean instead, at schools like St. George’s, or Ross University School of Medicine in Dominica and American University of the Caribbean School of Medicine in St. Maartin, both owned by DeVry Inc. The programs tend to have higher price tags than their U.S.-based counterparts, and their outcomes vary widely.
The first-time pass rate for St. George’s students taking the first step of United States Medical Licensing Exam last year was 98%.
St. George’s, whose four-year medical degree has a price tag of $246,400, is eligible to receive federal financial aid dollars. Its medical and veterinary schools received upwards of $85 million in federal unsubsidized and Grad PLUS loans in the first quarter of calendar 2014.
Modica met Altas founder Andrew J. Sheiner about 18 months ago, and the deal formed from there, they said. Sheiner founded Altas in 2012 after working as a managing director at Canadian buyout firm Onex Corp. Its other main investment is NSC Minerals, a Saskatoon, Saskatchewan industrial salt provider.
Baring Private Equity Asia advises funds with upwards of $5 billion in committed capital.
AUGUST 8, 2014 — MELISSA KORN, THE WALL STREET JOURNAL