Charme, Livingbridge sell Witherslack to Mubadala Capital

Both vendors are to retain minority stakes in the company following the deal.

Livingbridge acquired a majority stake in Witherslack (then known as James Bowers Education) in February 2011. The GP invested GBP 20m as part of the deal, according to a report from the Business Desk.

Unquote sister publication Mergermarket reported in October 2016 that Livingbridge was reviewing exit options for Witherslack with PwC, following exponential growth since its original investment.

Charme invested in Witherslack alongside Livingbridge in September 2017. A source close to the situation told Unquote at the time that Charme had taken a majority stake in the company. Charme invested via Charme Capital III, which held a final close in January 2017 on EUR 645m, while Livingbridge invested in the deal via its 2016-vintage, GBP 600m fund, Livingbridge 6.

Five Arrows Principal Investments and Royal Bank of Scotland provided debt financing to support the deal.

According to a report from the Financial Times in June 2021, Charme Capital was seeking a buyer for Witherslack, with PwC again mandated as sell-side adviser. According to the report, the GP was expecting a valuation of around GBP 600m.

Mubadala Capital is a subsidiary of sovereign wealth fund Mubadala Investment Company. The subsidiary generally makes equity investments of USD 50m-250m, although it has flexibility to pursue deals beyond this range, according to its website. 

Mubadala Capital manages private equity and venture funds, and can also make balance sheet investments. The GP held a final close for MIC Capital Partners III in August 2021 on USD 1.6bn.

Company
Founded in 1996 and headquartered in Lupton, Witherslack operates 25 schools and care homes for children and young people in the UK with special educational needs (SEN). The company provides private care in partnership with SEN professionals and local authorities.

The company generated revenues of GBP 44.1m in 2016. According to its latest publicly available accounts for the year to 31 August 2020, the company posted turnover of GBP 95.2m, versus GBP 75.1m in the previous year. It posted operating profit of GBP 18m for the 2020 financial year, compared with GBP 9.4m in the previous year. The firm employs 1,800 staff.

People
Charme Capital – Julian Huxtable (partner).
Livingbridge – Adam Holloway (partner).
Witherslack Group – Philip Jones (CEO).

Advisers
Vendor – PwC (corporate finance); Macfarlanes (legal); LEK (commercial due diligence); Deloitte (financial due diligence, tax).
Management – CMS (legal).

19/08/21: This article was amended to clarify the distinction between Mubadala Investment Company and its subsidiary, Mubadala Capital.

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