The directors of iSAMS, a management information system (MIS) provider used by a third of British private schools, have instructed corporate financiers to explore a potential sale of the business, EducationInvestor Global can reveal.
This publication has learnt that Alastair Price, founder and managing director, and Gregory Pakes, technical director, have mandated deal-makers at Grant Thornton, the UK’s fifth-largest accountancy firm, to explore sale options on their behalf.
The organisation offers a suite of products and tools designed to enable independent and international schools to more efficiently track their finances, resources, parental engagement and student performance. iSAMS claims to be the first cloud-based platform of its kind.
Grant Thornton is courting a number of potential investors, including private equity-backed trade buyers and buyout houses, it is understood. This process could culminate in the sale of a minority or controlling stake in iSAMS, or no transaction at all.
According to corporate filings with Companies House, Price is the majority shareholder in iSAMS, which he launched in 2005. He had been inspired to solve the frustrations of his teachers at the prestigious Rugby School, which he attended alongside business partner Pakes.
In the year ended 30 September, 2019, iSAMS recorded turnover of £8.4 million – up from £6.9 million a year prior – and profit of nearly £632,000.
However, in its 2019 strategic report, iSAMS’ directors highlighted that research and development costs “in the region of” £1.25 million linked to the launch of a new product, iFinance, were factored into its profit and loss account.
Putting aside R&D costs, iSAMS’ profit margin would therefore have stood at just under 23% last year, based on the aforementioned figures.
A source said that Grant Thornton puts iSAMS' annual EBITDA at £1 million.
In its 2019 strategic report, iSAMS’ directors acknowledged the “significant impact” of Covid-19 on the global economy and education sector but noted that the group “continues to be in a strong position to enable business operations and activities to continue with no disruption to service”. Working capital commitments “are funded by internally generated cash from the company with no borrowings and strong cash flows”, the report continued.
iSAMS is used by more than 950 schools in over 75 countries and has more than 500,000 daily users. In the UK, iSAMS is used by 30% of independent schools, according to its 2019 strategic report.
Rugby School and nearby Warwick School – believed to be the oldest boys’ private school in the world – were iSAMS’ first “partner schools” in 2005, its website states. iSAMS was then “promptly sold into the old-boys network”, a source said.
Grant Thornton declined to comment. Price had not responded to a request for comment at the time of publication.
The auction of iSAMS will be launched against a backdrop in which numerous UK-based MIS providers are exploring sales, mergers and capital raises.
This week, EducationInvestor Global exclusively reported that Bain Capital and TPG Capital had tabled first-round bids for London-listed Capita’s Education Software Solutions (ESS) unit, which encompasses SIMS, an MIS provider used by around 80% of UK schools. Capita ESS is expected to fetch upwards of £500 million at auction.
Two competitors to iSAMS, Arbor Education and The Key, are set to finalise a tie-up this month, as reported exclusively by this publication. ECI Partners and CBPE Capital, two private equity firms, are vying over a minority stake in the new entity, which is understood to be valued at around £95 million.
This year has also seen the acquisition of Pupil Asset, another cloud-based competitor to iSAMS, by private equity-backed Juniper Education, which since January has made three bolt-on acquisitions, bolstering its suite of MIS products.
A source suggested that Juniper, which is owned by London-based Horizon Capital, had signalled interest in acquiring iSAMS. A spokesperson for Juniper declined to comment.
A well-placed industry insider familiar with iSAMS and its range of offerings told this publication that its “software is a bit dated now and lagging behind others, but it has a decent footprint” in the UK private school market and overseas.
“It’s number one among independent/international schools; not much in the UK maintained sector; functionality is OK; but it has a reputation for being expensive and charging for everything,” the source added.
The chief executive of a UK private school group that uses iSAMS across all of its institutions told this publication that it is “expensive”, but “we like it”.
The advent of multi-academy trusts in the UK’s state-school system and continued consolidation among independent counterparts has given rise to private providers offering one-stop school-management solutions designed to maximise operational efficiency by freeing up teachers’ time.
In addition to its core MIS platform, iSAMS also offers three mobile applications geared at teachers, students and parents, which it launched in 2015, as well as data compliance functions and a school software marketplace.
Date published: 3 September 2020