The private equity backer of an online professional qualifications provider has instructed an investment bank to explore a sale of the business expected to net more than £100 million, EducationInvestor Global can reveal.

This publication has learnt that Primary Capital Partners has mandated Houlihan Lokey to find a buyer for ICS Learn, in which it purchased a controlling stake in 2018.

Headquartered in Glasgow, Scotland, ICS Learn is a professional education provider, which sells online courses targeted at people working in human resources, accountancy and business management. Its corporate clients include Adidas, the NHS, Vodafone and Santander.

According to filings with Companies House, ICS Learn in the year ended 31 December 2019 recorded turnover of £14.5 million, up 9% year-over-year, and earnings before interest, tax, depreciation and amortisation (EBITDA) of £4.1 million, up from £3.9 million a year prior.

However, an investment banker familiar with the business explained – on the condition of anonymity – that ICS Learn will be marketed based on a run-rate EBITDA figure of £8-9 million.

Houlihan Lokey will likely target a “low-teens” multiple of ICS Learn’s run-rate EBITDA, the banker added, saying: “My sense is that they [Primary Capital] want £100 million-plus.”

Another source confirmed that ICS Learn’s enterprise value will “certainly be above £100 million”.

Primary Capital declined to comment.

Houlihan Lokey, which is also marshalling the sales of online training provider Circus Street and private equity-backed online assessment provider Questionmark, declined to comment.

Primary Capital acquired ICS Learn from its former owner Par Equity in May 2018, when one of its funds bankrolled a management buyout led by chief executive Colin Kennedy and finance director Alison Doyle.

At the time, Par Equity said that the sale of ICS Learn returned “over 75-times the initial investment and over 100-times if you take Enterprise Investment Scheme reliefs into account”.

Founded in 1889 in Pennsylvania by a journalist, ICS Learn is accredited by a number of awarding bodies, including the Chartered Institute of Personnel & Development (CIPD), AQA and Edexcel.

ICS Learn, in addition to professional development training, offers online GCSEs, IGCSEs and A-levels, as well as apprenticeships in accountancy, marketing, procurement, leadership and project management.

The organisation reportedly no longer has ties to its US counterpart, the Penn Foster Career School.

Under Kennedy’s leadership, ICS Learn has transitioned to an online-only delivery model, through which more than 25,000 ‘current students’ in over 100 countries are educated.

In its 2019 strategic report, ICS Learn’s directors stated that, amid the Covid-19 outbreak, “the performance of the business during this time has been strong, with student enrolment numbers ahead of plan and cash balances continue to grow”.

Date published: 17 March 2021

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