Sovereign's Paragon Skills enters second round of auction

The sell-side is marketing the asset based on GBP 3m in annual EBITDA, two sources said. Paragon Skills booked EBITDA of GBP 1.1m against turnover of GBP 9.8m in the year to 31 January 2021, according to Companies House filings.

Preliminary bids were due in December, one source said.

Management & Training Corp (MTC), a US-based contractor that manages private prisons and operates in the UK via subsidiary MTCNovo, is likely to be interested in Paragon Skills, according to a fourth source familiar.

Sovereign Capital has owned Paragon since 2008, when the mid-market buyout group reportedly paid GBP 15m for the Bournemouth-headquartered training firm.

During its unusually long holding period, Sovereign Capital has turned around and injected fresh equity into Paragon, according to the fourth source. In 2016, the sponsor appointed Heather Frankham, an industry veteran who founded Lifetime Training and Bud Systems, as chair to spearhead the company's turnaround strategy, the source added.

"The turnaround story is compelling – it's going really well at the moment," the fourth source commented.

Sovereign Capital does not list Paragon among its portfolio companies on its website.

In 2010, Paragon Skills acquired childcare training provider Platinum Training & Development, as reported.

Paragon Skills supports more than 4,000 learners and 1,500 organisations, according to its website. The firm is rated "good" by UK education regulator Ofsted.

Sovereign Capital and Grant Thornton declined to comment.

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