Palatine realises successful first exit from the Impact Fund with Estio Training
Our Impact Fund has made its first exit with the sale of Estio Training to global education provider BPP Education Group.
Estio is a specialist provider of NVQ level 3 and level 4 IT and digital apprenticeships, provided through its online delivery model. The company addresses a national, growing IT skills gap by making it easier for candidates to be successfully matched with funded industry training places, leading to excellent new or enhanced career prospects in the growing and sought after skill area of IT and digital technology.
The exit has generated an excellent return for us, providing a clear demonstration that strong financial returns and social impact can be aligned. Since the original investment in September 2018, Estio has grown its revenues threefold and expanded the number of learners on programme by over 40% whilst still maintaining a strong focus on quality and inclusivity.
Our Impact Fund team has worked closely with Estio’s co-founder and CEO Lee Meadows to scale the business, whilst also promoting a shared agenda of improving social inclusion, diversity and accessibility to education.
Estio has achieved positive outcomes in a number of areas since our investment, including first time pass rates increasing to 95%, the number of female enrolments increasing by 33% and the proportion of learners residing in areas of deprivation increasing to 35%. In addition, the most recent monitoring assessment by OFSTED in February 2021, rated Estio’s service delivery at the highest-possible level, with a ‘Significant Progress’ grading.
During our three year involvement, significant investment has been made in the company’s digital infrastructure which, more recently, enabled it to successfully navigate the operational challenges posed by the Covid-19 pandemic which included an immediate switch to a purely online delivery model. Our investment also supported Estio with the acquisition of a business operation in Birmingham in late-2018.
We have also helped strengthen Estio’s senior leadership team, bringing in a range of expertise, with senior education leader Nichola Hay MBE appointed as Chief Operating Officer in 2019 to specifically focus on the quality of delivery, and Chief Financial Officer, Mark Dobson and Chief People Officer, Annette Martinelli, also joining the business during the investment period.
Estio has also benefitted from our market leading ESG focus and approach, which has improved the company’s sustainability performance across multiple areas, with a key achievement being a reduction in carbon footprint by over 90%.
James Gregson, Senior Investment Director in Palatine Private Equity’s Impact team said: “Estio has been an excellent investment for the Palatine Impact Fund and we are delighted to deliver such a strong result with our first exit.
“The objective of the Impact Fund is to deliver returns with purpose and Estio is the perfect example of this. With our support, the team have made significant progress in terms of quality and learner outcomes to make a positive difference which has now been combined with a strong financial return and exit to a like-minded, high quality training provider in BPP.
“BPP represents the ideal strategic partner to take Estio onto the next phase of its development and the combination of the businesses represents a fantastic opportunity to continue to drive growth in the UK apprenticeship market. We have thoroughly enjoyed working with Lee and the rest of the team over the last three years and wish them every success as they move onto the next chapter of growth alongside BPP.”
We were advised by Rob Burden, James Croxen, Christian Pollard and Chris Gayston at Clearwater International, and Andrew Green and Samantha Wright at Addleshaw Goddard.