Exclusives

Chinese property investor takes control of Gabbitas Education, tutor to Britain’s royal family

Gabbitas, the 147-year-old Londonbased educational consultancy that has famously tutored members of Britain’s royal family, has been acquired by a Chinese property magnate.

This publication revealed that Calvin Ho, a Hong Kong-based property investor of Chinese origin, acquired Gabbitas in June from its former owner Shaw Trust, one of the UK’s largest charities.

Corporate filings with Companies House show that Ho was appointed as a director on 9 June, when the role of Vanessa Miner, Gabbitas’ former managing director, was terminated.

The roles of Jacqueline Oughton (director) and Stephen King (secretary) were terminated on the same date. The owners of Park School in Bournemouth, England, have hired an accountancy firm to explore a sale of the business amid the coronavirus crisis, which estimates suggest could wipe out hundreds of British private schools.

This publication learnt that the four directors of Park School, which is privately owned, have mandated corporate financiers from Mazars Group, one of the UK’s top-10 accountancy firms, to sell the school.

According to sources, Park School, which has around 380 day pupils aged two to 11, records annual EBITDA of around £1 million.

Filings with Companies House – which do not include a profit and loss account – showed that in the year ended 31 August 2019, Park School had total equity of £1.45 million.

A sale of the school is being explored during the most challenging period for private schools in recent memory, as the Covid-19 pandemic, which has already forced more

Oughton is Shaw Trust’s chief operating officer and King is its chief financial officer.

Shaw Trust, whose mission is to help disabled and disadvantaged people into employment, took control of Gabbitas in November 2017, when it acquired Prospects Group, its former parent.

Oughton confirmed the sale of Gabbitas to this publication and noted that Miner had been employed under a two-year contract.

Following a strategic review of Gabbitas that was initiated last year, Shaw Trust decided that “Gabbitas did not fit with the long-term objectives” of the charity, said Oughton.

She explained that a management buyout spearheaded by Miner and than 10 independent schools to close, could wipe out as many as 180, according to consultancy EY-Parthenon.

It is understood, however, that Park School remains profitable – although the impact of the coronavirus crisis on its enrolments could not be determined.

One source told this publication that “there will definitely be interest bankrolled by Ho was considered but in the end was dropped in favour of a “straight sale” to Ho.

“Had it fitted with Shaw Trust’s values and objectives, we would’ve retained it [Gabbitas],” said Oughton. “It’s very well-renowned and has a huge future.”

The sale illustrates a deepening trend in which Chinese investors and operators are consolidating parts of the UK private education market.

Three British independent schools – Wisbech Grammar, Heathfield Knoll and Abbots Bromley – were acquired this year by Chinese investors, while in April a cash-strapped private university was resuscitated by China Education Group. Bournemouth, England in it” as “it seems to be doing fairly well” and is situated in a “decent location near the coast”.

Park School, which is led by headteacher Melanie Dowler, is not reviewed by the Good Schools Guide, but its most recent compliance report from 2018 by the Independent Schools Inspectorate (ISI) found that “results were well above the national average for maintained schools”.

Some 17 British private schools are now owned by Chinese entities, according to Venture Education, a China-based consultancy.

Little is known about Ho, 39, but the property investor is understood to have had a relationship with Gabbitas for several years prior to acquiring the company.

It is understood that Ho’s organisation provided office space to Gabbitas in China.

The price paid by Ho for Gabbitas is unclear.

Gabbitas had not responded to a series of questions from EducationInvestor Global at the time of publication.

British independent school hires advisors to run auction

(Full story available online.)

According to the ISI, Park School is “run as a limited company with four directors, who are known as the school governors”.

Andrew Main is listed on Park School’s website as chairman of the board of governors.

Park School could draw interest from Chinese investors and operators, which collectively control 17 British private schools, according to China-based consultancy Venture Education.

Last year, Foshan-headquartered bilingual school operator Bright Scholar acquired CATS Colleges and two British independent schools, after it bought Bournemouth Collegiate School in 2018.

By car, Bournemouth Collegiate School is less than 10 minutes from Park School.

Park School was founded in 1928 in Portsmouth, but moved to its current location, one mile north of Bournemouth town centre, in 1939.

A spokesperson for Mazars Group declined to comment.

Exclusives

Private equity houses vie for stake in enlarged competitor to Capita SIMS spawned by merger of rival providers

A trio of private equity firms are competing for a minority stake in an entity that will be formed by a merger of two UK-based school management information system providers, Arbor Education and The Key.

This publication revealed that the competing companies are set to merge by September under a deal that will refinance the newly formed organisation by onboarding private equity capital.

According to three sources, buyout houses ECI Partners, CBPE Capital and Levine Leichtman Capital Partners are vying over a minority interest in the joined-up firm, which, according to insiders, will generate annual EBITDA of around £5 million and have an enterprise value of £95 million. London-listed private equity firm Intermediate Capital Group (ICG) is the frontrunner in a race to acquire the British and Irish Modern Music (BIMM) Institute, three sources told this publication.

This publication learnt that ICG, which is listed on the London Stock Exchange and valued at around £4.2 billion, is closing in on the private music college, which was put up for sale last summer by its owner Sovereign Capital Partners.

The London-based mid-market buyout house hired investment bankers from Houlihan Lokey to drum up interest in BIMM, which has been on the market for over a year and at one point drew attention from Inflexion Private Equity Partners, according to sources.

One private equity investor familiar with the businesses – the merger between which is being drawn up under ‘project beagle’ – said the valuation was “incredible”.

First-round bids were due on 14 July, according to one source, who said that final proposals are expected to be tabled by the end of August, paving the way for a merger the following month.

The size of the stake in the merged entity being sought by ECI Partners, CBPE Capital and Levine Leichtman – and the price for which it will be bought – is unclear.

A spokesperson for CBPE Capital declined to comment.

ECI Partners and Levine Leichtman had not responded to

Since January 2018, ICG has owned PSB Academy, a Singaporebased tertiary education provider with campuses in the city-state, as well as in Indonesia and Myanmar, that offers degrees awarded by Australian universities.

It also controls UK-based Supporting Education Group, whose subsidiaries include Judicium Education, a school services provider; Best Practice Network, a provider of training and accreditation; tutoring network InTuition Clubs; and Teaching Personnel, a recruitment company.

Two sources said that ICG was in exclusive talks with Sovereign Capital Partners, which also owns London preparatory school group Eaton House, while another insider described it as “the frontrunner” to acquire BIMM. requests for comment at the time of publication.

Ian Armitage is chairman of The Key, of which he owns approximately 75%, “give or take”, according to one source.

He is also a non-executive director of Arbor, in which he personally holds a 14% stake while 16% is controlled by The Key – giving Armitage and his primary organisation a combined 30% share.

Armitage, who also chairs Odyssean Capital and is an advisor to Tenzing Private Equity, injected £1 million into Arbor in 2015.

“He [Armitage] has an option to acquire the remainder of Arbor on certain terms over a certain period of time,” an insider told this publication. “To help fund

The development comes four weeks after BIMM – which Sovereign describes as “Europe’s largest and leading music college group” with around 7,500 students at campuses in the UK, Ireland and Germany – acquired the Northern Ballet School in Manchester.

In accounts filed with Companies House for the year to 31 August 2019, BIMM reported EBITDA of £16.9 million against revenues of £43.3 million.

Its profit for the year was £11.7 million.

A spokesperson for ICG declined to comment.

Houlihan Lokey declined to comment.

Sovereign had not responded to a request for comment at the time of publication. that acquisition, he’s looking for a minority investor, which will ultimately acquire a stake in the combined business.

“It’s also an opportunity for the leadership team at The Key to update their management packages.”

Armitage, a private equity veteran who from 2000-2012 was chief executive and chairman of HgCapital, which he co-founded, is being advised by management consultancy Jamieson on the merger.

Hg Capital owns Access Group, a UK-based provider of business management solutions to companies across a range of industries, including education.

Armitage declined to comment.

London-listed private equity group ‘frontrunner’ to acquire BIMM

(Full story available online.)

Sovereign took over BIMM in 2010, when it had 1,150 students enrolled at its colleges in Brighton and Bristol in the UK.

BIMM, which boats an 86% graduate employment rate in creative arts, according to Sovereign, now owns 12 colleges across Europe.

Last March, it was granted degreeawarding powers in the UK, where it is headquartered.

BIMM is led by chief executive Adam Carswell, who joined the firm in 2011 from an apprenticeship provider, where he was finance director.

The impact of the coronavirus crisis on BIMM’s enrolments is unclear.

Former BIMM students include pop artists George Ezra, Tom Odell and James Bay. (Full story available online.)