Learndirect, the British training provider that nearly went bust in 2018 after having its government funding pulled, has been acquired by Queen’s Park Equity, a new buyout house established by two former Sovereign Capital partners, EducationInvestor Global can reveal.

This publication has learnt that Queen’s Park Equity has bought Learndirect from Dimensions Training Solutions, which took over the company in 2018 from Lloyds Development Capital.

Queen’s Park Equity was founded by Jose Rodriguez-Cesenas and Jonathan Kay, who led a number of London-based Sovereign Capital’s education- and training-focused investments.

Filings with Companies House show that on 12 August, Learndirect Digital Group Limited – of which Rodriguez-Cesenas is a director – became a ‘person with significant control’ of Learndirect. George Doolittle, a 29-year-old investment advisor, is also listed as a director of Learndirect Digital Group.

When acquiring a company, it is typical for a private equity firm to incorporate a new entity through which to execute the transaction.

The acquisition, the value of which is unclear, is Queen’s Park Equity’s first, this publication understands.    

A spokesperson for Queen’s Park Equity said the firm was “not planning to make any announcement until later in the year” when contacted by EducationInvestor Global.

The transaction comes at a difficult time for the UK apprenticeship sector, in which new starts in April were down 72% year-on-year, as training providers grappled with centre closures enforced in response to the pandemic and challenges around online delivery.

Earlier this year, the sale of Lifetime Training by its private equity parent, Silverfleet Capital, was abandoned due to the financial implications of Covid-19, as reported exclusively by this publication. Silverfleet Capital will hold onto the business for several more years in order to recoup losses linked to the coronavirus crisis, it is understood.

Lifetime Training used to be owned by Sovereign Capital, at which Rodriguez-Cesenas led its investment in the organisation and its expansion within the UK apprenticeship arena, according to an insider.

“Jose understands that market as he worked on Lifetime when Sovereign owned it,” the source said.

Founded in 2000, Learndirect was once Britain’s biggest further education provider.

But in August 2017, it was rated ‘inadequate’ by Ofsted, Britain’s education watchdog, which led the government to withdraw all of its training contracts and funding, worth nearly £100 million, catapulting the company towards insolvency.  

Less than a year later, in June 2018, Learndirect secured a takeover deal with entrepreneur Wayne Janse van Rensburg of Dimensions Training Solutions, who took the reins of the embattled provider after earlier talks with PeoplePlus Group around an acquisition had fallen over. Janse van Rensburg at the time was managing director of Stonebridge College Group, which supplied Learndirect’s virtual-learning environment.

When Janse van Rensburg took over Learndirect for a “nominal fee”, it was teetering on the brink of collapse, with debts totalling £48.5 million and zero government-funded contracts, which prompted a wave of redundancies and asset sales in a bid to stave off bankruptcy.

But just seven months after being taken over by Dimensions Training Solutions, in January 2019, Learndirect won European Social Fund contracts worth more than £20 million.

In the 18 months ended 28 April, 2019, Learndirect’s turnover increased to £47.6 million from £9.6 million, corporate filings show.

Although it recorded a loss of £5.1 million over that period, “the directors believe that [the] group is now in a stronger position and the underlying group business activities are profitable”, Janse van Rensburg wrote in his strategic report.

Date published: 10 September 2020

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