A large-cap services provider backed by private equity giants KKR and Hg has hired bankers to carve out one of its education subsidiaries, EducationInvestor Global can reveal.

This publication has learnt that the UK’s Citation Group is offloading EPM, or Education Personnel Management, via an auction being led by GCA Altium, which last week orchestrated the sale of ECI Partners-backed software provider CPOMS.

Based in Manchester, Citation Group is a provider of subscription-based compliance and quality services and products to businesses, including education providers, across the UK. In the year ended 31 December 2020, the organisation booked revenue totalling £99.7 million and gross profit of £72 million, statutory filings show.

Citation acquired EPM, which sells HR and payroll services to schools, in 2017, when it served more than 1,300 institutions across 65 local authorities.

Since then, EPM has grown its market share substantially, sources noted. However, one corporate financier who confirmed GCA Altium’s sell-side mandated said it was “too early” to place EPM’s enterprise value.

EPM could draw interest from strategics and private equity suitors, which may see opportunities to combine its offerings with other education services and solutions. Trade suitors could include IRIS Software Group, Supporting Education Group, and Horizon Capital-backed Juniper Education, one banker said.

Citation and GCA Altium had not responded to requests for comment at the time of publication.

Following fresh investment from previous owner Hg and its most recent investor, KKR, Citation last December acquired e-learning provider iHASCO, as revealed by EIG. Statutory filings show that iHASCO was valued at £46.6 million at the time of the transaction.

KKR bought Citation from Hg in August last year. However, the deal included an option allowing Hg to re-invest, and Hg exercised this option just weeks later in September, becoming a co-owner alongside KKR.

Through its suite of services, Citation serves more than 40,000 SMEs across the UK.

Prior to Hg and KKR, the firm was owned by ECI Partners, which recently exited education portfolio company CPOMS via an auction also led by GCA Altium, as revealed by EIG.

Date published: 14 October 2021

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