Providence sells Tes Global to Onex

Unquote sister publication Mergermarket first reported in July 2021 that Tes was up for sale. In October 2021, Mergermarket reported that the process had drawn interest from Onex and KKR. The report stated that Onex prioritises deals in which the target is in need of operational improvement; in Tes's case, concerns about the size of its technology sector and the development of its recruitment business emerged during the process. Further sponsors linked with the process earlier on included Carlyle, ICG, Montagu and CVC.

Onex is deploying equity via Onex Partners Fund V, which held a final close in November 2017 on USD 7.15bn. The vehicle generally backs buyout deals with enterprise values of USD 200m-750m. The fund will be approximately 78% invested following the deal, according to a statement.

Onex plans to leverage its experience in business services and supporting companies with their acquisition plans, the GP said in a statement.

Providence announced that it was to acquire Tes in an SBO from TPG Capital in December 2018, deploying equity via Providence Equity Partners VIII. The fund held a final close in September 2019 on USD 6bn and generally invests in companies with enterprise values of USD 500m-2bn. At the time of Providence's investment, the company posted EBITDA of around GBP 40.5m and revenues of GBP 145.7m.

During the investment period, Tes acquired software platforms including Edval, EduCare and SchoolCloud, pivoting the company's business model towards software subscription-based services.

Previous funding
Tes (then known as TSL Education) first came under private equity ownership in 2005, when Exponent Private Equity backed a GBP 235m MBO from former parent News International.

Charterhouse Capital Partners bought the company in an SBO in 2007.

TPG acquired TSL from Charterhouse for a reported GBP 400m in 2013, with the company rebranding as Tes Global the following year.

TPG sold the majority of Tes's operations to Providence in 2019, aside from its Times Higher Education (THE) division, which had previously been carved out from the business. TPG sold the THE division to Inflexion in March 2019, fully exiting its investment in the company.

Company
London-headquartered Tes provides software for the education sector in three core areas: staff management; safeguarding and compliance; and pupil and learning management. Its software is used by more than 17,000 schools in 117 countries.

The company posted revenues of GBP 99.4m in the 2019/20 financial year, versus GBP 98.2m in the previous year, according to its latest publicly available accounts. The company posted adjusted EBITDA of GBP 43.6m in 2019/20, versus GBP 41.2m in 2018/19.

People
Onex – Nigel Wright (senior managing director).
Tes Global – Rod Williams (CEO).
Providence Equity Partners – Andrew Tisdale (senior managing director).

Advisers
Equity – Rothschild & Co (corporate finance); Latham & Watkins (legal).
Company – Arma Partners (corporate finance); Morgan Stanley (corporate finance); Weil Gotshal & Manges (legal).

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• Topics
• Exits
• Buyouts
• UK / Ireland
• Technology
• United Kingdom
• Secondary buyout