A combination of rising profits and a growing need to invest in talent has created a buoyant corporate training market, expected to grow at a CAGR of 10.6% from 2016-20201. It is, however, a market that remains highly fragmented with few players of scale and one populated by numerous small niche training providers.
These are increasingly offering blended learning solutions that converge more traditional physical learning with digital solutions. Whilst human engagement is still considered important, the greater flexibility and global scalability of web-based training is making digital an increasingly attractive medium.
Over the last five years a diverse range of buyers have been targeting providers. Purchasers have included: consulting companies looking to smooth lumpy project based revenue; publishers attempting to combat ailing printing divisions; and support services groups moving into higher margin activities with more stable revenue streams.
One of the most prolific acquirers has been German media company Bertelsmann, which has turned to M&A in a bid to deliver on its €1bn revenue target from its education division.
Two areas that have been particularly active for M&A are that of compliance and aviation.
The high profile failing of Lehman Brothers and the state bail-out of other banks highlighted the consequences of poor risk management and compliance practices. It also created opportunity for training providers which were able to benefit from increased budgets as companies hired external experts. Deals have included Wilmington plc’s acquisition of SWAT Group and Herkules Capital’s purchase of Norwegian-based Seagull.
A recent report by aircraft manufacturer Boeing reported that the global aviation sector will require an additional 28,000 commercial pilots a year by 2034 if it is to keep pace with demand for air travel. The alarming statistics highlight the growing need for pilot training solutions and underpin strong growth prospects for leading providers. Deals have included L3 Technologies €165m purchase of CTC Aviation, and Finnish investor, Sentica Partners, acquisition of Coptersafety Oy. A further deal came in the form of CAE Inc.’s purchase of Lockheed Martin’s Commercial Flight Training division.
Read about our recent transaction
Clearwater International advises on Babington Business Limited MBO
Clearwater International has advised the management of Babington Business Limited (Babington) on the MBO backed by RJD Partners LLP (RJD).
Based in Derby, Babington provides apprenticeships and skills training to learners and employers from its ten training centres across the UK. Babington specialises in providing training in the fields of accounting, finance, and business administration, together with high growth subject areas such as digital media and marketing.
RJD is an independent private equity investor focused predominantly in the services and leisure sectors in the UK. Having taken a majority stake, RJD is looking to build on its track record of investing in training and talent management businesses.