Sovereign Capital announces the £22 million institutional buy-out of leading UK Special Education Needs Group

Sovereign Capital Limited ("Sovereign Capital") announces that it has led the £22 million institutional buy-out of Honormead Schools Limited ("Honormead"), the UK's pre-eminent group of residential schools for children with Special Educational Needs (SEN).

Sovereign Capital has supplied funds to support the IBO and to finance acquisitions which have already been identified. In addition the funds include capital to finance the group's expansion by organic growth. Bank of Scotland's Specialist Property Finance Unit provided the debt funding.

Honormead is a group of residential schools based in Derbyshire and Staffordshire for children with speech and language difficulties and associated challenging behaviour. The group's flagship school, Alderwasley Hall School, which has a national reputation for being the UK's leading school in its field, has just been recognised as 'outstanding' by *OFSTED (5 February 2003), and has been acknowledged as such in the Chief Inspector of Schools Annual Report.

The 300 children at Honormead's facilities have complex needs and benefit from being within a dedicated and specialist environment. The group was founded in 1976 by Brenda Brook, a renowned educational psychologist and has remained in family ownership since.

Sovereign Capital, which is the largest UK owner of independent mainstream and SEN schools, identified the IBO opportunity at Honormead and created a management solution, which satisfied the family's succession plans. Sovereign Capital brought together the new management team which is led by Terry Lee, CEO, previously Head of Priory Healthcare's Services for Young People division. Kathryn Baines joins as FD from Four Seasons Healthcare and the Chairman is Iestyn Williams, the Executive Director of Serco plc.

This latest transaction is the fourth investment in Education and Healthcare Services that Sovereign has made in the last ten months. The other investments are the management buy-out of Complete Personal Assistance, the UK's leading provider of specialist care for young severely disabled people; the MBO of C.H.O.I.C.E., a provider of residential services for adults with learning disability and the IBO of Davies Laing & Dick, the independent schools group.

Terry Lee, CEO, Honormead Schools Limited commented:

"Honormead has an excellent reputation and is widely recognised for its achievements in this specialist education area - fully demonstrated by its latest recognition by OFSTED. I am very pleased to be heading the new management team and look forward to expanding the group's SEN offering through complementary organic growth and acquisitions."

Ryan Robson, Director, Sovereign Capital Limited, who joins the Board of Honormead, commented:

"Honormead is a leading special education needs group with an excellent reputation for developing children's potential within its specialism of speech and language difficulties and complex needs. As a family owned business, the management was keen to find a buyer who understood the business and shared a similar approach to education and care. There is significant demand for specialist facilities and we believe that the opportunity to grow the business across all areas of SEN is tremendous."