ECI looking to kickstart CPOMS sale after summer

The sale process for the Yorkshire-based business is expected to begin after the summer, one of the sources said. GCA Altium was appointed last month, this source added.

Mergermarket reported last month that ECI was sounding out potential advisers to assist with the exit of CPOMS and could look to do an off-market deal for the asset. Discussions of a sale were prompted by inbound enquiries from strategic and financial players on the back of similar deals in the space, including the £400m sale of Capita's [CPI:LSE] Education Software Solutions (ESS) business to Montagu in December last year, the report noted.

The company generates EBITDA of around £10m and could be valued in the region of 15-20x EBITDA, as previously reported by Mergermarket. It is likely to attract interest from US strategics and UK-based private equity firms, as reported.

GCA Altium previously advised UK-based school software provider SchoolCloud in a comparable deal when it was acquired by TES Global in February this year for an undisclosed fee, as reported.

CPOMS's software system allows school staff, across both primary and secondary education, to log any concerns relating to the wellbeing of a pupil, including behavioural issues, bullying and special educational needs.

The company was bought by ECI in December 2018 for an undisclosed fee, as reported. Its software is used by around 13,000 educational establishments worldwide.

GCA Altium declined to comment. ECI and CPOMS did not respond to requests for comment.

Activity in the education sector has got off to a promising start in 2021, with 10 deals accounting for more than €700m in aggregate value inked already, as recently explored by Unquote. Recent deals have included Bowmark's split sale of Oxford International, as well as Magnum Capital's acquisition of Spain-based postgraduate business school operator ISDE. Most recently, Stirling Square reportedly agreed to acquire Medisup Sciences, a provider of preparatory courses for admission tests to French medical universities; the deal valued the business at around €350m (14x EBITDA).

Beyond CPOMS, further processes currently in the pipeline include Eurazeo's Swiss hospitality management education group Sommet Education and Palatine's TTC Group, a UK-based provider of road user education and compliance services, according to Mergermarket.

Market sources see pricing as particularly frothy when a digital angle is involved, with the intersection between software and education – where CPOMS operates – being one of the most powerful drivers of investor interest. "[For assets focused on education technology and online learning], the market has been very hot, with multiples in the 15-20x range becoming the norm. Overall, the number of assets in the education sector is relatively small, so good opportunities attract a lot of competition," Manuel Zulueta, CEO of DC Advisory in Spain, told Unquote.

This article was originally published in Unquote sister publication Mergermarket

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