Back2Work Complete Training has instructed corporate financiers to find a new minority investor in the pre-employment training provider through an equity sale that could soon close, EducationInvestor Global can reveal.

This publication has learnt that shareholders in Back2Work have mandated Clearwater International to marshal the sale of a minority stake in the Manchester, England-headquartered company.

Clearwater International is understood to be courting a number of UK-focused private equity investors.

Confirming the mandate to this publication, Luke Muscat, managing director of Back2Work, said: “We’ve retained Clearwater International for a number of years to support our growth strategy including helping us consider investment in the business from private equity and other investors.

“The management team are excited about the growth opportunities available for Back2Work and remain committed to the long-term future of the business.”

Clearwater International declined to comment.

Back2Work provides pre-employment training courses in fields such as construction, health and social care, and security.

An industry insider said that Clearwater International, which is also overseeing the auction of e-training provider iHASCO, was “close” to lining up an investor in Back2Work, whose annual EBITDA is being marketed as £2 million, according to sources.

Financial statements – which do not include a profit and loss account – filed with Companies House show that in the year ended 31 March, 2019, Back2Work’s net assets were valued at £2.7 million.

Though the size of the stake being sold off was unclear, the source said that “the process is fairly progressed” and added that Clearwater international had launched “informal” pre-marketing efforts in March.

Since then, the mid-market advisory group has approached a range of potential investors, two of which, according to a source, were Learning Curve and Lifetime Training, two UK-based private equity-backed apprenticeship providers.

However, Silverfleet Capital, which owns Lifetime Training, told this publication that it was not seeking a stake in Back2Work and had not seen a prospectus created by Clearwater International.

A spokesperson for Learning Curve, which earlier this year was acquired by Agilitas Private Equity in a £100 million deal orchestrated by Clearwater International, said the firm is “regularly offered opportunities to expand the business. We remain committed to growing both organically and through acquisition.” In March, Learning Curve bought a London-based hair and beauty training provider.

The sale of a minority stake in Back2Work to a buyout house or private equity-backed operator would mark a continuation of consolidation within the UK training market despite the worst pandemic in generations.

Since the Covid-19 outbreak began in January, several training companies, including iHASCO, have come to market, while others – such as Corndel, the sale of which Lincoln International is launching later this year – are laying the groundwork for auctions.

Clearwater International has previously brought to market several training companies, including Learning Curve, The Skills Network and, most recently, iHASCO, which remains in play. 

According to its website, Back2Work, which was incorporated in 2011, has trained more than 10,000 learners. Telecoms giant BT and foods conglomerate Nestle are listed among its “partners”.

Due to social distancing measures imposed in response to the Covid-19 pandemic, Back2Work has “taken the decision to stop the delivery of our classroom-based training programmes”, the company states on its landing page. The disclaimer continues: “We will, however, be moving all of our training onto our distance learning model, which will allow learners to achieve the relevant training/qualification and, where relevant, progress into their chosen employment opportunity, despite the impact of the Covid-19 disruptions.”

The financial impact of the coronavirus crisis on Back2Work is unclear.

Date published: 10 August 2020

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