The owners of Ireland-based EssentialSkillz have drafted in advisors to explore a sale of the business as consolidation in the compliance training sector gathers pace amid Covid-19, EducationInvestor Global can reveal.
This publication has learnt that the firm, which provides online corporate compliance and health and safety training to professionals, has appointed corporate financiers from KPMG to prepare it for auction.
This comes less than a week after EducationInvestor Global revealed that the owners of iHASCO, a UK-headquartered healthy and safety e-training provider, had mandated advisors from Clearwater International to sell the company.
The auctions will be carried out against a backdrop in which the coronavirus crisis has increased demand for workplace training to protect employees from online threats while working from home.
Meanwhile, due to heightened regulations around professional industries, companies are required to ensure that staff are compliant at all times – so spend on training is sustained, even during economic downturns.
“Any compliance-based services are always hot in a downturn as you can’t do without them or switch them off,” said one advisor, who had also “picked up that a trade buyer was trying to take it [EssentialSkillz] off the market”. The person did not name the trade buyer, however.
According to one source, EssentialSkillz, which lists 64 online training courses on its website, records earnings before interest, tax, depreciation and amortisation of around £1 million, “albeit it will be marketed as larger”.
Filings with Companies House – which do not include a profit and loss account – show that the firm had total equity of £128,710 as at 31 December, 2018.
Sources suggested that for EssentialSkillz a buyer would pay more than 10-times its earnings.
An M&A advisor to education and training companies said: “Mid-teens would be racy but 11-to-13-times [EBITDA] sounds sensible.”
One source indicated that private equity-backed software and training provider Access Group could be interested in acquiring EssentialSkillz.
Access Group, according to sources, could also be a suitor for iHASCO.
Founded in 2001 in Galway – where it is still headquartered – by husband and wife Tony and Michelle Dervan, EssentialSkillz is headed up by chief executive Julian Roberts, while Mr Dervan is chairman.
Roberts previously worked for 17 years as managing director of Safety Media, which was acquired by Access Group in July last year.
According to its website, EssentialSkillz has offices in Chester in the UK and Delaware in the US, as well as in Ireland.
Roberts, Dervan and KPMG’s press team had not responded to requests for comment at the time of publication.
Date published: 30 June 2020