PeopleCert has reached a deal to acquire qualifications provider AXELOS from Capita and the British government, just weeks after this publication exclusively revealed its intentions to bid for the business.
The transaction, which is subject to approval by Capita shareholders and regulatory approvals, values AXELOS at £380 million on a ‘cash-free, debt-free’ basis. This means that PeopleCert does not receive any cash on AXELOS’ balance sheet and its former owners are responsible for any debt obligations.
It will see US-based buyout group FTV Capital take a minority stake in PeopleCert, which this publication revealed in May had lined up private equity financing to support its ambitious bid for AXELOS.
The offer was seen by bankers with whom EducationInvestor Global spoke as ambitious because AXELOS, by measure of revenue, is much larger than PeopleCert.
However, PeopleCert has enjoyed a deep-rooted commercial relationship with AXELOS since it was formed under a joint venture in 2014. Since 2018, PeopleCert has been the exclusive examination institute licensed to deliver AXELOS qualifications.
Barclays oversaw the auction of AXELOS, which manages and operates professional qualifications and certifications in methodologies formerly owned by the British Office of Government Commerce.
Shares in Capita, which last year offloaded its educaiton software solutions unit, slipped more than 3% after the takeover was announced.
Byron Nicolaides, chairman and chief executive of PeopleCert, said: “PeopleCert has been intimately involved in developing the success of AXELOS over the years and looks forward to working with our ecosystem of partners around the world to further build on this successful track record.”
Richard Garman, founding partner at FTV Capital, said: “Enterprises spend approximately $400 billion annually on corporate training programmes including the upskilling of employees to maintain a highly skilled and competitive workforce. PeopleCert offers a differentiated approach to helping enterprises – through technology, longstanding and deep industry expertise, and outstanding partners, PeopleCert delivers high quality business, IT, and language exams to a global customer base that spans over 200 countries.
“We are thrilled to partner with Byron and the exceptional management team, and to support PeopleCert’s agreement to acquire AXELOS that will build on the company’s market-leading and differentiated position within the assessment and certification industry.”
PeopleCert was advised by BofA Securities and Morgan Stanley, which provided financing for the transaction.
Domius Capital Advisors acted for PeopleCert on its minority investment by FTV Capital.
Gorgoneion Partners provided additional financial advice to PeopleCert regarding its acquisition of AXELOS.
Milbank served as legal advisor to PeopleCert.
EY-Parthenon produced a commercial due diligence report, while EY provided financial and tax due diligence.
Date published: 22 June 2021