Two private equity firms have tabled first-round bids for Learning Pool, the Northern Ireland-based e-learning company, EducationInvestor Global can reveal.
This publication has learnt that mid-market buyout firms Bowmark Capital and ECI Partners participated in the preliminary round of bidding for Learning Pool, the deadline for which was 11 May.
Headquartered in Derry, Learning Pool is an e-learning provider that partners with corporates to build courses for employees. The firm has more than 1,100 customers worldwide and over five million ‘active learners’.
US investment bank Baird collected bids on behalf of Learning Pool’s majority shareholder, Carlyle Cardinal Ireland, a €300 million fund co-managed by The Carlyle Group and Cardinal Capital, an Irish asset manager.
In February, EducationInvestor Global exclusively revealed that Learning Pool was set to come to market. Meanwhile, The Times reported in April that bankers would target offers of €160 million for a controlling stake in Learning Pool. This price is equal to more than seven-times the company’s revenues of £18.1 million (€21 million) recorded for the year ended 30 April 2020, or 27-times its earnings before interest, tax, depreciation and amortisation (EBITDA) of £5 million (€5.8 million). Carlyle Cardinal Ireland reportedly paid £20 million for Learning Pool in 2016.
A corporate finance source described the €160 million price tag as “very punchy” but noted that “the quality of [Learning Pool’s] earnings and focus on recurring revenue is razor sharp”. Learning Pool’s core offering is sold as software-as-a-service (SaaS), hence its revenue retention is high, which is why bankers have calculated its enterprise value based on a multiple of revenue, rather than EBITDA.
The value and terms of the offers filed by Bowmark Capital and ECI Partners are unclear.
An investment banking source told this publication that Baird had also drummed up interest from several US-based investors, whose identities are unclear.
Bowmark Capital and ECI Partners declined to comment. Baird did not respond to a request for comment.
In recent years, Learning Pool has expanded through a combination of organic growth and acquisitions.
Between April 2019 and the same month of 2020, Learning Pool grew revenue by 32% – 18% of which was organic, while the remaining 14% was generated by its takeover of e-learning provider HT2 Labs. This deal followed earlier acquisitions of Mind Click and MediaCorp, both of which are UK-based.
Most recently, in December, Learning Pool bought Remote Learner, a US-headquartered learning management system (LMS) provider.
Bowmark Capital between March 2014 and March this year backed Oxford International Education Group, which was split in two under an exit that saw the company’s private schools division acquired by Nord Anglia, while its university pathways, online learning and language-training unit was bought by THI Investments, a private equity firm.
ECI Partners owns school software provider CPOMS, which is currently being prepared for market ahead of an auction slated to launch later this year – as revealed exclusively by EducationInvestor Global in March.
Date published: 13 May 2021