UK Healthcare & Education Update - 2017
Following our 2017 summary of UK healthcare and education M&A (found here) published earlier in January, we're now diving a little deeper into the key trends seen in 2017.
Nexus Corporate Finance are active across all of the sub-sectors in healthcare and education, working with an interesting pipeline of clients for 2018. Focusing on buy-side, sell-side, and providing fundraising advice, with deep sector knowledge, NCF are looking forward to working with you in coming year!
For day-to-day updates in the UK Healthcare and Education sector, follow us on twitter @Nexus_CF
This month's activity:
2017's M&A Activity - recent healthcare and education M&A activity
Last Word - Tamsin Dewhurst founder of uptree
2017's M&A activity
Based on NCF's analysis of disclosed deals, there were around 127 healthcare acquisitions or investments with a UK focus in 2017. The most active segment was care services, with over 50 completed transactions in the year, including a number of significant transactions in the space. This included HC-One’s acquisition of 122 Bupa care homes for £300m in August and Antin Infrastructure Partners' acquisition of specialist educator and care provider Kisimul in July for more than £200m.
There has also been significant investment in retirement villages in 2017, which is set to continue in 2018, following a hiatus of around a decade! Interesting investments include: L&G investing £40m into Inspired Villages; Axa Investment Managers acquiring Retirement Villages Group (c. £100m); and Moorfield Audley Real Estate Fund successfully raising in excess of £285 million, acquiring and investing in Audley Retirement Villages.
Healthcare IT, was also a particularly active sector, with the number of transactions more than doubling from 2016. Acquirers within the Healthcare IT sector have predominantly come from outside the healthcare sector with listed software groups, private equity and insurers making up the majority of the transactions.
Significant transactions include Montagu Private Equity’s £224m take private bid for Servelec in November, Partners Group’s $1.3bn acquisition of business software solutions provider Civica from Omers PE in July and Graphite Capital’s acquisition of medical animation company Random 42.
Acquisitive firms include Idox software, GCP backed Arrow Business Communications, and Eli Global backed Clanwilliam Group.
2017 saw continued investment into multi-site platforms, including the Jacobs Holding acquisition of Southern Dental, August Equity's investment in Genesis Dental and The Linneaus Group's acquisition of Village Vets. Investment into the diagnostic imaging sector also saw an increased number of deals following Apposite's acquisition of Medical Imaging Partnership and Life Healthcare's acquisition of Alliance Medical, witch will drive further investment into the sector for 2018.
NCF expect to see more activity in multi-site platforms in 2018, moving away from the traditional buy-and-builds seen in the past few years (dentists, vets...), and moving into diagnostic imaging, occupational health and physiotherapy/osteopathy.
NCF recorded over 60 transactions in Education in 2017, with edtech and training services being the most active segments for M&A, accounting for approximately 50% of transactions in the year.
Investment in the training segment was predominantly driven by private equity investors with Palatine, Charme Capital Partners, Downing, Key Capital Partners and CVC all investing in or acquiring training businesses in 2017. The most significant transaction was CVC Capital Partners’ £700m acquisition of IT training provider QA Training in June.
Within Education Technology, there were approximately 20 transactions in 2017, with the majority of businesses being sold to trade acquirers. Notable international purchases include Investcorp's £27.5m acquisition of Impero, a school network management software provider, the acquisition of school management information system provider Furlong Business Solutions by Volaris Group, part of Canadian listed Constellation Software Inc.
The roll up in nurseries continued with larger, well-funded, groups such as Busy Bees, ICP nurseries (ICP) and Les Petits Chaprons Rouge (LPCR) successfully acquiring smaller owner-managed businesses. Busy Bees’ £93m acquisition of Treetops Nurseries and LPCR’s acquisition of Kiddi Caru leave few significant groups left in the market.
This month's Last Word is by Tamsin Dewhurst, founder of uptree.
Is school careers advice failing our young people?
"In July 2016 the parliamentary subcommittee on Education Skills and The Economy concluded that ‘inadequate careers advice is exacerbating skills gap’, and that ‘too many young people are leaving education without the tools to help them consider their future options’. This confirmation of British schools’ dire career services comes as no surprise to me or — I’d think — most teachers.
As a teacher my experiences with schools’ careers advice has been mixed. Some schools definitely do a stellar job, but they are exceptions and not the norm. As part of Teach First, I taught in a state school in Enfield that catered to a large number of young people from low-income communities. Here I found that there was barely a shadow of a careers service in a school where the young people already lacked access to a professional network and careers awareness.
With nearly half of teachers planning to leave in the next 5 years, and a staff loss rate that’s the highest it’s been for a decade, British schools are losing staff at pace. So it’s easy to understand that good careers advice might be less of priority. In the face of staff and resource shortages (not to mention the high pressure on academic achievement), careers advice can feel insignificant when everyone is giving their all just to keep their books marked and lessons planned.
But our students are suffering — particularly those from schools with high numbers of Free Schools Meals and Pupil Premium students — they aren’t connecting with enough professionals; they don’t have the confidence to reach out to sectors that they are interested in; they don’t know how to write a good CV; they don’t understand their options well enough to be able to make the best choices for them.
We set up uptree (find out more at uptree.co) in July 2015 with the idea that we could solve this problem. That we could build an online platform and community that supports students to understand the options that are available to them, and to get them meeting professionals and entering places of work that match their interests. We are on a mission to provide young people with opportunities to interact with four or more professionals before leaving education. Why? Because it’s proven that they’ll be five times more employable."