Sovereign Capital completes further recapitalisation - SCLP I now returned 66% at cost

Sovereign Capital Partners LLP ("Sovereign Capital"), the independent lower mid-market UK private equity firm, is pleased to announce the £37m recapitalisation of Alpha Plus Holdings ("Alpha Plus"), the second largest owner and manager of private schools and colleges in the UK.

This recapitalisation, combined with investment yield to date, has enabled Alpha Plus to repay all of Sovereign Capital's original investment and brings the amount returned to the Fund, 'Sovereign Capital Limited Partnership I' ('SCLP I'), to 66% of money invested to date. Sovereign's majority shareholding in Alpha Plus remains unchanged.

This is the fifth recapitalisation in SCLP I and follows the successful recapitalisations in 2004 of specialist residential care groups, SENAD and CHOICE, and in 2005 of DC Leisure, an operator of local authority leisure centres, and Complete Group, the UK's leading provider of specialist care for young victims of complex injuries. It demonstrates the ongoing strong growth of the SCLP I portfolio.

Sovereign Capital first invested in Alpha Plus in May 2002 through a £26m institutional purchase ("IBO"). Then, the group operated 11 schools and colleges including some of the most prestigious in the country. Today, Alpha Plus owns or manages 20 schools and colleges providing high quality education services to over 2,500 pupils and students.

Since the IBO, Alpha Plus has seen a 76% organic growth in sales to £30m. Developments include the newly created Wetherby Preparatory school, the launch of Abingdon House School, a new private day school providing supported learning for pupils with specific learning needs, and new buildings for DLD College and three of the Abbey Colleges. The group strategy is to continue to grow by organic expansion and selective acquisition with its new banking partner and Sovereign Capital.

Commenting on the recapitalisation, Ryan Robson, Partner, Sovereign Capital says: "Alpha Plus has established a reputation for high standards of education and service to parents and children. Our investment has helped the management team to achieve dynamic growth and give more children access to high quality facilities and education.  The recapitalisations to date demonstrate Sovereign's success in backing robust growing businesses within selected sectors and deploying a focused buy & build strategy across its portfolio."

Funding for the recapitalisation was provided by Royal Bank of Scotland led by Matt Field and Jennifer Murray. Sovereign Capital were assisted by Samer Cortas and William Allen of Blenheim Advisors.

Duncan Innes of Marriott Harrison led the legal advice for Alpha Plus. Kym Jese and Richard Mann of DLA acted as legal adviser for Royal Bank of Scotland.

Kevin Whittle managed the recapitalisation for Sovereign Capital.