UK-based Babcock International has mandated EY to carve out its apprenticeship business Babcock Training, EducationInvestor Global can reveal.

This publication has learnt that the process was launched a few months ago and is now close to the finishing line, with final bids expected by the end of June.

The company has been marketed off an EBITDA of around £5 million, according to two sources close to the process. The sale has attracted the interest of a wide pool of bidders, including some mid-market private equity firms, turnaround funds and trade buyers.

“There has been high interest in this sale process, especially from private equity and turnaround funds that have the competence and expertise to invest in a carve-out from a larger public company,” one of our sources said. “This is one of the largest providers of training and apprenticeship in the UK but has not been a core asset for Babcock International. With the right strategy in place, it could deliver higher margins and achieve stronger growth.”

Founded in 1993, Babcock Training offers apprenticeships for a range of sectors, including retail, hospitality, leisure, adult care and early years care, alongside a wide provision of business administration, customer service and management apprenticeships.

The business is part of Babcock International, an engineering services group established in 1981 and listed on the London Stock Exchange. The firm generated revenue of £4 billion in the financial year ended 31 March 2021 and £2.2 billion, with £75 million of operating profit, in the six months ended 30 September 2021.

This sale would align with the disposal strategy of non-core assets aimed at paying down debt announced by the company in 2021, which included the sale of its oil and gas aviation business completed in August 2021 for £10 million; the sale of Frazer-Nash Consultancy to KBR, inked in October 2021 for £293 million; and the disposal of a stake in AirTanker Holdings for £95 million. The firm also completed the sale of its power business to PAI Partners-backed M Group Services for £50 million in December 2021.

Furthermore, Babcock International is currently disposing of its Spanish emergency air services division formerly known as Inaer. The firm mandated HSBC last October to run the sale of the unit, which is now close to being sold to British infrastructure fund manager Ancala Partners for £100-200 million, according to press reports.

Date Published: 9 June 2022

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