Servoca acquires Classic Education
Servoca plc has acquired Classic Education.
Ryecroft Glenton Corporate Finance advised on the sale.
The acquisition is to be funded from existing cash resources and debt facilities and the initial consideration is £1.2m.
In addition, Servoca will pay deferred consideration of up to £1.9m, subject to Classic Education meeting certain profit targets for the two years following acquisition.
Servoca states that the acquisition of Classic Education supports its stated strategy to grow its existing education recruitment business, by giving it access to a new geographic area with high levels of demand, but where Servoca does not currently have a presence.
Kent-based Classic Education was founded by four shareholders, including joint managing directors, Sue Flesher and Mandy Day, in 2005. Flesher and Day are being retained by Servoca plc to lead the future growth and development of the business, along with the existing staff. In the year ended 31st March 2016 unaudited pre-tax profit was just under £0.6m. In the opinion of the Board, the adjusted sustainable pre-tax profit at constant gross profit levels is circa £0.4m to £0.5m. At 31st March 2016, unaudited management accounts showed Classic Education had net assets of £0.4m.
The company, which operates from offices in Gravesend, Kent, places primary and secondary school teachers on a temporary and permanent basis. Classic Education is a member of the REC and held accreditation with the former Department for Education, Schools and Families Quality Mark having achieved 100% in its assessment.
The board of Servoca expect the acquisition to be earnings enhancing in the year to 30th September 2017 with minimal impact in the current year.
Advising on the sale of Classic Education, on behalf of its shareholders, were Carl Swansbury and Alex Simpson from Newcastle-based Ryecroft Glenton Corporate Finance. Legal advice was provided to the shareholders by Brachers Law.
Servoca plc was supported in its acquisition with legal advice from Mills & Reeves.
Andy Church, chief executive officer of Servoca plc, said, “We are delighted that Classic Education is now part of Servoca. This acquisition complements our existing branch network in education and gives us a local presence in the Kent and South London market, an area with significant demand for education recruitment services.
“The acquisition of a long-established local provider in this area increases our national branch network coverage. In total we now have 15 UK locations and one overseas office from which we service local schools. We look forward to working with the staff and management that have helped build the business into one of the leading providers in the area”.
Flesher commented, “As part of Servoca plc, Classic Education has the opportunity to strengthen its position in the market and enhance the excellent levels of service we currently provide to our clients and candidates. Mandy and I are very proud of the success we have achieved for Classic Education and look forward to working with the team at Servoca plc to deliver continued growth.”
Carl Swansbury (pictured, left), partner at Ryecroft Glenton Corporate Finance, added, “Classic Education has become well-established in its sector and it will become a valued part of the Servoca plc education staffing business. The growth of Classic Education is testament to the drive and determination of Sue, Mandy and their team who will have an important role to play in taking the business forward.”