Sovereign sells leading independent schools group Alpha Plus returns 5.5x investment

Sovereign Capital ("Sovereign"), the UK buy & build private equity specialist, announces the realisation of its investment in Alpha Plus Holdings Limited ("Alpha Plus"), one of the UK's leading groups of independent schools, colleges and nurseries through a sale to Delancey, the specialist investment advisor, for an undisclosed amount. The exit returns 5.5x money invested and represents an IRR of 53%.

Alpha Plus was acquired by Sovereign in 2002 in a £26m institutional buyout.  At the time of the acquisition, Alpha Plus comprised 11 schools.  Under Sovereign's ownership, it has become one of the largest groups of independent schools in the UK, seeing a 44% increase in pupil numbers to circa 2,800 through both organic and acquisitive growth.  Today the group consists of 17 schools, with a further two schools in development, covering the spectrum from nursery to 6^th Form.  Alpha Plus' portfolio of schools includes some of the most prestigious names in the country including The Wetherby Preparatory School, Pembridge Hall and Davies Laing and Dick College in London, and The Cliff School in Wakefield.

To support the highly regarded head teachers at the schools, Sovereign strengthened Alpha Plus' senior management team by bringing in CEO Paul Brett, a former teacher and Strategic Director of Serco plc's educational business, Managing Director Azhar Mobin, also a former teacher and Head of Education at the Audit Commission, and Financial Director Roger Bird, a chartered accountant who was previously Financial Controller at Lidco Group plc.

The facilities in the Alpha Plus schools have been equipped to the highest standard to create interactive learning environments following significant investment over the past five years to develop new sites and enhance existing facilities.

Turnover and EBITDA for the current year are forecast to increase by CAGRs of 16% and 33% respectively since the time of Sovereign's original investment.

Sovereign is delighted that Delancey recognise the value and potential of the Alpha Plus brand and is committed to continuing the growth of Alpha Plus by investing in new school sites and facilities through leveraging their real estate credentials.

Commenting on the transaction, Ryan Robson, Managing Partner at Sovereign Capital, said:

"The Alpha Plus growth story is an excellent example of the benefits that Sovereign Capital's buy and build strategy consistently brings to our portfolio companies and investors.  Alongside management we have developed Alpha Plus into one of the UK's most prestigious groups of independent schools where places are highly sought after by parents and children around the country.  Our commitment to invest in the Group over the last five years has been rewarded by an excellent return for our investors as we hand over to Delancey."

Paul Brett, Chief Executive of Alpha Plus Group, said:

"Sovereign has supported considerable investment in the schools to deliver the gold standard of premium quality education to our pupils.  Sovereign's knowledge of, and experience in, education has complemented Alpha's management expertise and together we have built a robust business whilst simultaneously raising standards, results and demand for places at our schools. Delancey's confidence in the group is an endorsement of the progress that Alpha Plus and Sovereign have made."

Jamie Ritblat, Chairman and Chief Executive at Delancey, added:

"We look forward to building on the impressive reputation of Alpha Plus and adding our real estate expertise to the excellent educational and management credentials that have been developed under Sovereign's ownership."

This is the fifth exit from Sovereign's first Fund (SCLP I) which, together with previous exits, has returned an average multiple of 5x and an average IRR of 69% (realised returns). The Fund contains seven further investments which continue to grow strongly.