Clearwater International advises training provider on private equity deal

Birmingham-based Clearwater International has advised Back2Work on its investment from Palatine Private Equity (Palatine) for a stake in the training provider which supports individuals to return to employment and develop new skills.

The investment is being made from Palatine’s £100m Impact Fund.

Manchester-based Back2Work specialises in delivering intensive training courses to help the long-term unemployed return to work, retrain or reskill.

The business also offers a digital marketing apprenticeship programme and runs online training courses for employed people to support career progression in sectors such as health and social care.

Founded in 2010 by managing director Luke Muscat and chairman Tony Bailey, Back2Work has seen strong recent growth.

On the back of a number of key long-term contract wins to deliver pre-employment training for numerous devolved Combined Authorities, annual revenues have risen to £11.5m.

As a result, Back2Work’s own headcount has increased to more than 140 employees, with the business now supporting more than 11,000 people with their training every year.

This is the sixth education and training transaction the Clearwater International team has advised on this year, and the second in the vocational training sector having previously advised on Agilitas Private Equity’s investment in Learning Curve.

The Clearwater International deal team comprised partner Rob Burden, partner Marcus Archer, partner Rob Britton, director Mark Maunsell, senior associate Kieran Virr and executive Thomas Hickey.

Luke Muscat, managing director of Back2Work, said: “We engaged with Clearwater International in January 2019, initially to help us prepare for a process and once ready, to support us in raising finance and bringing onboard a new equity partner. Since the point of engagement, we have found the Clearwater team to be extremely knowledgeable and highly skilled in their capacity as advisors and we could not be any happier with the end result as we join forces with the Palatine Impact Fund.”

Rob Burden, partner, Clearwater International, said: “Back2Work is a highly reputable training provider and its services couldn’t be more vital in the current circumstances to help reduce unemployment in the UK. Back2Work has been hugely successful in securing direct funding through the Adult Education Budget devolution process and the investment from Palatine will give the business the financial and commercial support to continue its current growth trajectory. We would like to wish the entire team all the best for the future.”

James Gregson, senior investment director for Palatine’s Impact Fund, added: “Back2Work is an excellent business delivering a clear social impact by helping people return to work and gain new skills. We are excited to be working with Luke and his dynamic team to build on the company’s strong recent growth and support the continued focus on employment outcomes and career progression. Back2Work is a compelling investment for the Impact Fund with a highly relevant proposition as the UK adjusts to the impact of the COVID-19 pandemic which will inevitably create new requirements for retraining and upskilling.

“With further devolution of adult education budgets on the horizon, we see strong potential for further organic growth across all parts of the business. Given the scale of the opportunity in the training sector and our track record in buy and build, we are also keen to consider potential acquisition opportunities.”

Jodi Birkett at Deloitte provided financial advice to Palatine on the transaction.