Bridges exits apprenticeship provider Babington Group after strong growth

18th April 2016

Babington is now one of the UK’s leading apprenticeship and traineeship providers Revenues have increased eight-fold under Bridges’ ownership During the period it has provided training to more than 32,000 learners and helped over 3,700 formerly unemployed people to find jobs Sale price of £22m represents an IRR of 33% for Bridges Bridges Ventures (“Bridges”) […]

  • Babington is now one of the UK’s leading apprenticeship and traineeship providers
  • Revenues have increased eight-fold under Bridges’ ownership
  • During the period it has provided training to more than 32,000 learners and helped over 3,700 formerly unemployed people to find jobs
  • Sale price of £22m represents an IRR of 33% for Bridges

Bridges Ventures (“Bridges”) announces the sale of Babington Group (“Babington”), one of the UK’s leading providers of apprenticeships and training courses, to RJD Partners for £22m.

Bridges, a specialist sustainable and impact investor, originally invested in Babington Group in 2009 via the Bridges Sustainable Growth Fund II. Under its ownership, Babington’s revenues have increased from under £2m to more than £15m, thanks to strong organic growth and two strategic acquisitions. Today’s sale price represents an internal rate of return for Bridges of 33%.

Bridges invested in Babington in line with its focus on backing companies that have a clear growth opportunity by tackling major societal challenges or responding to long-term macro trends.

A skills shortage continues to hamper the UK’s economic recovery, with one in five job vacancies remaining unfilled; while employment among 16-24 year-olds continues to lag behind pre-crisis levels, with almost a million classified as NEET (not in education, employment or training). Bridges believed that Babington’s high-quality apprenticeships and traineeships could help to address this skills gap, by allowing businesses to harness fresh talent and enabling staff to develop specialist skills through on-the-job training.

The Bridges team, which has extensive experience of buy-and-build strategies, worked closely with management throughout the investment period – initially to strengthen the senior team, and subsequently to identify, execute and integrate two bolt-on acquisitions. Bridges also initiated the development of Babington’s e-commerce strategy, which led to the creation of its innovative online learning platform.

The company has also continued to diversify its product offering, by expanding its Traineeship provision and increasing the breadth and depth of courses available: it now offers qualifications ranging from Intermediate Apprenticeship (Level 2) all the way up to Doctorate Level (Level 8). Notably, it has become a market leader in Accountancy and Financial Services, where it is rated as ‘Outstanding’ by Ofsted and enjoys success rates 10% above the national average. It has been the UK’s largest provider of Chartered Insurance Institute qualifications for the last three years.

Under Bridges’ ownership, Babington has supported over 32,000 learners, and helped over 3,700 formerly unemployed people to find jobs. Last year alone, it trained 1,600 16-18 year-olds at risk of becoming NEET, with about two-thirds of its students coming from underserved areas of the UK. Throughout its strong growth, student satisfaction levels have remained consistently high, with 93% citing overall satisfaction (against a national benchmark of 85%), and employer satisfaction at 92% (against a national benchmark of 74%). It now works with over 2,100 employers to source and support talent.

Garret Turley, partner at Bridges Ventures, said:

“We have always believed that apprenticeships can play an important role in tackling the UK skills gap – and we identified Babington as a high-quality provider that could help to meet this growing need. We’re very proud that our investment has enabled the company to achieve a step change in its growth since 2009, allowing it to help thousands more students gain additional qualifications. With its outstanding management team, strong product offering, and exceptional satisfaction rates, we fully expect Babington to enjoy continued growth under its new owners.”

Carole Carson, CEO of Babington Group, said:
“Bridges has been a consistently supportive partner for Babington since 2009, helping us to strengthen the team, build out the online platform and promote our brand – ultimately enabling us to work with more employers and reach many more learners. Apprenticeships are a vital tool in helping to address skills shortages in the workplace, and we continue to see strong support for them both at policy level and within the business world. This leaves Babington ideally positioned to explore additional growth opportunities in the coming years.

Keely Woodley and Victoria Giles of Grant Thornton advised the shareholders on the process, with legal advice from Richard Spink and Tim Roberts of Burges Salmon.

 

NOTES TO EDITORS

About Babington Group (www.babington.co.uk)

Founded in 1974, Babington provides high-quality business training courses within Accountancy, Business Administration, Digital Marketing, Social Media, Property Services, Sales & Marketing, Hair & Barbering, I.T. User Skills, Retail, Providing Financial Services, and Team Leading & Management.

Babington offers classroom-based business courses in the Midlands and North of England, along with professional distance learning business courses throughout the UK.

About Bridges Ventures 

Bridges Ventures LLP is a specialist fund manager focused exclusively on sustainable and impact investment, with offices in London and New York. It invests in high-impact SMEs, properties and social sector organisations that can generate superior returns for investors and positive impact for society, focusing on four key impact ‘themes’: health & wellbeing, education, sustainable living and underserved markets. It manages almost £600 million across its Sustainable Growth, Property and Social Sector funds.

The Bridges Sustainable Growth Funds provide capital and support to high-growth, high-impact businesses that are helping to tackle some of society’s most pressing challenges. The Bridges Sustainable Growth Fund II achieved a final close at £75m in 2007.

About RJD Partners

RJD Partners is an independent private equity investor focused on lower mid-market companies predominantly in the services and leisure sectors in the UK. RJD provides equity funding solutions for buyouts, buy-ins and businesses requiring development capital, investing between £5 million and £25 million of equity in transactions valued at up to £75 million. It aims to be flexible in the funding solutions it offers and highly selective in the businesses it backs.

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