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Graphite Capital backs MBO of Explore Learning

publication date: Sep 2, 2012
Graphite Capital, the mid-market private equity firm, is backing the management buy-out of Explore Learning, the supermarket-based English and maths tutorial company. Graphite is acquiring a majority stake in Explore Learning from a group of investors including the Spectrum Venture Management Fund and Wittington Investments Limited. Explore Learning’s senior management team led by founder Bill Mills is re-investing “a significant proportion” of its stake in the company. The financial terms of the deal have not been disclosed.

Setup in 2001, Explore Learning currently operates 62 “Maths & English tuition centres”, mainly located in Sainsbury’s supermarkets and shopping centres in the South of England although it does operate centres in the Midlands, North West and Scotland. The centres provide individualised key skills tuition in maths and English to children aged 5 to 14. The centres also offer additional courses including creative writing, enrichment mathematics and preparation for the 11+ exams.

In April 2012, Explore Learning reported an operating profit of £818k (2010: £872k) for the year ended 31 December 2011, on revenue up 29% to £15.2m (2010: £11.8m). The increase in revenue was helped in part by the opening of 12 new centres during 2011 and an increase in membership which stood at around 14,000 (2010: 11,200) at 31 December 2011. The company currently claims to have 16,000 children enrolled as members.

According to Graphite Capital, Mr Mills has ambitious expansion plans for the business, underpinned by forecasts of rising numbers of primary school children in the UK, as well as by a favourable schools policy and academic reform environment focused on improving educational attainment. Explore Learning plans to open a significant number of new centres in the UK and is considering overseas expansion.

The transaction deepens Graphite’s interest in the UK education industry following its £45m acquisition of Teaching Personnel from RJD partners in July 2010 and the subsequent £31m acquisition of Protocol Education from Bridgepoint Capital in August 2011. The two

acquisitions created the market leader in the provision of teaching staff in the UK. Graphite manages more than £1.2bn through three private funds and the publicly-quoted Graphite Enterprise Trust PLC. The current fund, Graphite Capital Partners VII, is a £585m fund raised in 2007.




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