Silverfleet Capital will retain ownership of Lifetime Training for up to three years after abandoning a sale of the apprenticeship provider whose revenues have been decimated by the pandemic, EducationInvestor Global can exclusively reveal.

Three sources familiar with Silverfleet Capital’s strategy told this publication that the London-based buyout house has called off the auction of Lifetime Training, which was being overseen by advisors from Houlihan Lokey, an investment bank.

One source said that Silverfleet Capital “definitely plans to hold onto it for another three years” to “restore profitability” that has been eroded by Covid-19, which forced the firm to close its centres indefinitely and furlough some 1,400 staff. Two other sources confirmed the three-year horizon, while another suggested that 12 to 18 months was “more realistic”. 

Most of Lifetime Training’s clients are in retail and hospitality – industries arguably among the hardest hit by a crisis that hammered high street footfall while forcing bars and restaurants to cease trading indefinitely. 

“There could hardly be two worse sectors to specialise in [at present],” said one source. The UK government has signalled that bars and restaurants could begin to re-open in July but is yet to commit to a date. 

The development came just eight weeks after this publication reported that a chorus of private equity investors, which included KKR and CapVest, had tabled preliminary bids for Lifetime Training, which had been marketed on EBITDA of £20 million.

It is an example of how private equity funds may have to extend holding periods that typically last around five years as a result of Covid-19 to eke out enough profits from affected businesses to satisfy their managers and investors.

Silverfleet Capital and Houlihan Lokey declined to comment.

Silverfleet Capital acquired Lifetime Training from rival mid-market private equity group Sovereign Capital in 2016 for between £115 million and £120 million. At the time, Lifetime Training recorded pre-tax earnings of around £11 million.

Founded in 1995, Lifetime Training skills some 20,000 people a year through its level two and three apprenticeship schemes. It was named apprenticeship training provider of the year in 2019 by RateMyApprenticeship.

But the ongoing pandemic has battered the UK apprenticeship sector, as traditional providers struggled to deliver classroom training while grappling with challenges around examinations and how to provide learners with work experience.

Last month, we reported that the number of apprenticeship starts in February was down more than 10% on the previous year. At the time, Mark Dawe, chief executive of the Association of Employment and Learning Providers, said starts were “falling off a cliff”.

Meanwhile, many of Lifetime Training’s clients, which include McDonald’s, Pret A Manger and Pure Gym, are closed or are making less money, and thus have less resources and cash to allocate to staff training. 

Date published: 29 May 2020

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