Innervation Capital Partners
Innervation Capital Partners (“ICP”) is a sector-focused, theme-driven investor. Proprietary deal sourcing is our primary source of sustainable competitive advantage, driving superior returns. In search of value, we focus on fragmented industries providing essential services. We exploit dislocations in pricing based on size and complexity. To execute this strategy we provide more than just capital. We work with our operating partners and proven entrepreneurs to craft a plan which realises the full potential of the business over the long term.
Innervation Capital launched its first growth platform, ICP Nurseries, in the UK’s £5.5bn Early Years Education sector in 2016: it focused on acquiring high quality leasehold schools located in under served markets across London & the South East. The second platform, Cresswell, was launched 3 years ago: it acquired “hidden gems” located across affluent areas of England, operating from freehold property and usually delivering Ofsted “Outstanding” education. Across both platforms, £80mm of capital has now been invested.
On December 23 2020, ICP Nurseries is acquiring Cresswell for a debt free Enterprise Value of £34mm. The holding company is changing its name to ICP Education Limited & becomes the 3rd largest player & the leading consolidator in the UK 0-4 years childcare industry.
Ares is investing £9.5mm in ICP Education’s preferred equity for an additional 5% equity stake at a strike price which implies an Enterprise Value of £111mm & LTM EBITDA multiple of 11.4x. Ares committed £61mm of senior facilities & a £45mm accordion to fund future acquisitions.
ICP Education brings together a team with 65 years proven operating expertise, led by Tracey Storey (CEO), with Stephen Booty (Chair) & Clare Wilson (CFO) who led the successful exit of Tree Tops to an international consolidation platform backed by Ontario Teachers & Temasek.
ICP Education’s future strategy is to acquire a further 20 Schools per annum over the next 5 years & to build a £45mm EBITDA business with 150 Schools by June 2026. This ambitious growth strategy requires a further £200mm of capital to be deployed. This will be funded in an 80:20 combination of senior debt and retained earnings.
ICP also owns a controlling stake in Eden Training Solutions (“Eden”). Eden is predominately focused on serving the Early Years & Education Sectors, with almost 76% of 1,000 LTM Learner Starts, studying at entry Level 2 (5 GCSEs) to Level 5, which is a degree level Higher Apprenticeship, in either Childcare or Education.
Eden is the preferred apprenticeship training provider to ICP Education & offers 2 Apprenticeships & 2 Advanced Learner Loans.
ICP has the capacity to invest equity from £1 million to £20 million and has the risk appetite & patience to scale essential services platforms from start-up to £500mm Enterprise Value, providing both capital and operating expertise, over a 10 year holding period.
“We buy complexity & sell simplicity”