Taaleem Acquires Jebel Ali School. First Not-for-Profit to Become For-Profit. Change “For the Better” says Current Leadership
Not for profit Jebel Ali School has been acquired by Taaleem Education Group, and will become the 18th school in the group. It marks the first time a not-for-profit school has been converted to a for-profit school. For reasons that are unrelated, Lizzie Robinson, the current principal, will also leave the school at the end of the current academic year.
The acquisition immediately removes the financial burden the Jebel Ali board and school leadership team had been working under. As part of the acquisition cost, Taaleem takes on all liabilities for the school, which includes, most significantly, the AED 70 million plus rent bill owed to Emirates REIT. The school lost its legal battle over the payment of its rent liabilities in September 2021 when the Arbitration Centre of Dubai International Financial Centre ruled in favour of Emirates REIT.
The school currently has 1,400 students, and average annual fees of 55,000 AED, giving it approximate annual revenues of AED 77m, almost exactly the amount it is in arrears.
Taaleem will also acquire the land and the buildings from Emirates REIT, which will return the school to profitability according to Taaleem’s CEO, Alan Williamson:
“Taaleem has paid for the land, and buildings, with a remainder of what we have paid, to be interpreted as either the liability that the school owes to Emirates REIT, or as the purchase price the school.”
Taaleem are paying 185.5 million AED for the land and buildings, the valuation given to it by one of the REIT’s independent valuers, Cushman & Wakefield, as of 31 December 2021. In addition Taaleem has agreed, on behalf of Jebel Ali School, to settle the school outstanding liabilities towards the REIT for an amount of AED 48 million. Taaleem have paid 233.5 million AED in total. Emirates REIT made 1.4 times its initial investment.
In addition to the land and buildings, a late condition of the sale has been to pay back all debentures over five years. Given the school will not be able to raise new debentures, the decision means an overall net increase in the sale price. On the plus side Taaleem says, having no debenture going forward will make student recruitment simpler, and the school more attractive to parents. The new debenture policy is as follows:
The ‘Debenture Scheme’ will no longer be available for newly applying families or supporting corporate sponsors. Parents/corporates that have applied for places in 2022-23 or future years will have their debenture(s) returned in full.
We greatly appreciate that current parents and corporate entities have invested in the school in the form of their debenture(s). Taaleem recognises that this investment has been vital to support the school’s aspirations and to significantly help develop it to where it is today.
However, Taaleem feel that it is only fair and equitable, and with the agreement of the Government of Dubai, The Ruler’s Court and the KHDA, are committed to reimbursing current debenture holders. This will be a phased, equal payment over the next 5 years to refund the full amount of the debenture(s). The payments will be refunded by Taaleem directly into the debenture holder’s bank account. This applies to both personal and corporate debentures.
Please be assured that this phased payment will not affect any of the school’s planned development or Taaleem’s commitment to significantly invest in the school.
Further details of the ‘Reimbursement Schedule’ will be shared with you in due course.
Any parent leaving the school will, of course be fully reimbursed, in line with the current policy. Those leaving in future years will be reimbursed in full minus any prior reimbursement payments.
The acquisition of the school by Taaleem safeguards all teacher salaries and contracts, which will be honoured ‘as is’ for one year, as well as the gratuities.
After one year Taaleem says it cannot commit to current staff contracts, just as it would not, given economic uncertainties globally, commit to a budget more than 12 months ahead for any of its schools.
The school had been under financial stress since its move from Jebel Ali six years ago. That move saw it grow from a primary school to an all-though school, funded by its deal with Emirates REIT. The key metrics of the business plan used to justify that deal, however, were never hit.
Lizzie Robinson told SchoolsCompared.com:
“We have always explained that the model upon which the school was due to grow didn’t come to fruition. It was built on criteria that the secondary school would fill up straightaway. It didn’t. It was built on things like the school fees in secondary would be put up. We haven’t been able to do that. So we’ve always been transparent with our community about where we are, and what financially we are being directed by. So, yes, it’s been stressful. But we’ve never ever believed that we wouldn’t find a solution.”
Both Taaleem and Jebel Ali’s current leadership are betting both parents and staff will stay, stressing that “nothing will change”. In fact, both Taaleem, and Jebel Ali’s current principal are convinced things will improve as the school moves to being a financially sound, for-profit school under Taaleem. When asked about any changes to the current budget Mr Williamson told us:
“I think, if anything they will be enhanced.
“One of the positives we hope is that the Jebel Ali school staff, parents and community will see a richness that comes as part of being in a school group. There will be ECAs that operate at DBS, for example, that we can offer the Jebel Ali school community. For teachers too, there will be a rich community for networking opportunities, whether you’re a maths Year 3 teacher teacher, physics teacher…”
Lizzie Robinson agreed:
“The move to Taaleem for JAS staff means more promotion possibilities. We’ve got some outstanding members of staff but, given we are a smaller, independent school, opportunities for them have been limited. We have real movers and shakers in terms of future leaders within Taaleem.”
In addition, Sam Truman, COO of Taaleem, confirmed post-acquisition the school group would kick start a four-year period of improvements to the school’s facilities:
“We’ve committed to a four-year campus improvement project to upgrade the facilities that, because of JAS’s budget constraints as a result of its rental costs, the school has not been able to undertake. It will be a considerable sum of money, and invested in consultation with the Jebel Ali leadership team who will help guide us on how facilities be upgraded.
“Both Ms Robinson and Taaleem’s leadership are aware that there may be some parents and teachers who choose to leave with the change in status from not-for-profit to for-profit, but I believe that the number will be small.”
Anyone that gives the school a chance will see, according to Mr Williamson, that “there “is no real difference between a for profit and a not-for-profit”.
“There’s no doubt that parents value that status in DC, DESSC and JESS and, currently, Jebel Ali. But I think parents most value being in a school where there is magic, that evidences values they believe in, and where their children are ultimately happy.”
“I am very sad to be leaving,” Lizzie Robinson told SchoolsCompared.com.
“Jebel Ali has been very close to my heart. It has the most incredible magic. And I hear, when I speak to colleagues at Taaleem, that they talk about their schools in the same terms. So this joining of two forms of magic is an incredibly exciting proposition.”
Ms Robinson leaves due to “highly personal reasons”, and thinks most staff will remain:
“I think the connection and connectivity of the staff will be strong enough to go through this change process. We will retain most of our staff, because essentially, the feeling when you walk into school will be exactly the same.”
To this end, Ms Robinson believes the new principal could not be a better fit and will preserve the school’s “special” DNA. We cannot reveal who this is yet, as it awaits KHDA’s approval, but she stated to SchoolsCompared.com:
“When I read about him and his passions, I thought…. he is a perfect fit. I would have chosen him myself.
“There is no doubt, the school is going to go from strength to strength, it’s going to be a good partnership, and we’re going to be able to do things that we haven’t been able to do before. And that Is a good thing.”
Background on this story
Do you have a view? Contact SchoolsCompared at [email protected] All comments and opinions can be shared in confidence by request.
© SchoolsCompared.com. 2022. All rights reserved.