RJD Partners sells Babington to Unigestion

Ero Partsakoulaki
16 December 2022

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RJD Partners has sold its stake in UK apprenticeship provider Babington to the private equity arm of the Swiss asset manager Unigestion.

Unigestion has invested in the business alongside the current management team, according to a press release.

Unquote sister publication Mergermarket reported on 8 December that the UK-based private equity firm was close to finalising a deal with Unigestion before Christmas. Lincoln International, sellside advisor to RJD Partners, had been targeting an enterprise value of GBP 40m-plus, as reported. It marketed Babington's EBITDA at around GBP 5m.

The deal between the two mid-market buyout groups comes after RJD Partners granted a period of exclusivity to BC Partners-backed strategic suitor Davies Group in August, as reported.

RJD Partners first invested in the business in 2016 via its RJD Private Equity Fund III, which held a final close on GBP 50.5m in May 2015, according to Unquote Data. It acquired the company from Bridges Ventures in a GBP 22m SBO, with Babington's management team taking a minority stake. Under the firm's ownership, Babington acquired the majority of PeoplePlus' apprenticeship business in 2020.

Unigestion has invested in Babington via its Unigestion Direct II fund, which is now fully deployed, Pieter-Jan Frederix, partner at Unigestion told Unquote. The vehicle held a final close on EUR 500m in October 2020 and invests in small-cap and mid-market businesses, according to Unquote Data. Falling under one of Unigestion's core investment themes, Future of Work, Babington is the GP's second buy-out in the UK education sector, following its investment in nursery and pre-school group, Kindred.

Following the deal, Unigestion plans to invest in products and partnerships, as well as to support a buy-and-build strategy, according to a press release. The focus will be on UK based providers of both apprenticeship and corporate training where the skill gap is the greatest, such as in digital skills and ESG, said Frederix. "We have ample firepower so that we can pursue both tuck-ins and sizeable add-ons," he added.

The deal comes after the firm's direct investment team led the buyout of Switzerland-headquartered elderly home care provider Home Instead in September and a minority investment in US-based logistics technology company FreightWise in April.

Unigestion is currently in the market with its latest direct investment fund, Unigestion Direct III, which announced its first close in October 2022, as reported by Unquote. It has now closed its first five investments in companies in the education, healthcare and waste management sectors, according to the press release.

In addition to its direct investment vehicles, Unigestion manages strategies including Emerging Managers Choice, which sees it make commitments to GPs raising their debut or inaugural fund, as well as direct investments alongside emerging managers. It has made commitments in the past to early funds from managers including Tenzing, Avallon and Northedge, according to Unquote Data.

The firm's second Emerging Managers Choice Fund has a EUR 200m target and is currently on the road, according to Unquote Data. Unquote reported in November that the firm is expecting to announce subsequent closes for the vehicle.

Company
Founded in 1974, Babington is an apprenticeship and training providers in the UK. Its scope of services ranges from apprenticeships and short qualifications to professional training and pre-employment courses. It has contracts with telecoms, infrastructure and public sector clients. In the last year, it has supported over 9,000 learners, providing access for free adult learning to 2,500 individuals and placing over 800 school leavers into entry-level roles with UK employers.

People
Babington − David Marsh (CEO).
Unigestion − Pieter-Jan Frederix (partner).

Advisers
Vendor – Lincoln International (corporate finance).
Equity − McDermott Will & Emery (legal); PwC (financial due diligence, tax due diligence and ESG); CIL (commercial due diligence); Grant Thornton (tax structuring); Global Counsel (political due diligence); EY (corporate finance).