Training group completes hat trick with £33m IT deal
Melorio plc, the AIM-listed vocational training group, has acquired Zenos Ltd, one of the UK’s leading IT training organisations, for a maximum consideration of approximately £33 million. Barclays Commercial Bank and Clydesdale Bank have provided a debt package to support the acquisition.
Zenos is Melorio’s third acquisition in 14 months as the company continues to build its portfolio of vocational training companies. Whilst the government is committed to provide funding for both Train to Gain and Apprenticeships, Melorio is focused on sectors of industry where there is great demand for training and assessment, and where demand is set to continue across the economic cycle. The identification of economic demand, combined with a strong commitment from the major political parties to the Leitch agenda of up-skilling the United Kingdom, puts Melorio in a strong position over the coming years.
Melorio was established in October 2007 to pursue a buy and build strategy in the training and skills sector. It acquired Construction Learning World, the leading provider of vocational training to the construction and infrastructure industry in October 2007, and HB Training, an academy based construction training business in October 2008. Melorio has also recently established a start-up business, Logistics Learning World, to provide vocational training to the logistics sector. It is headquartered in London with operations nationwide.
Zenos provides school leavers with IT qualifications through academy-based training programmes funded by the Learning and Skills Council. It also offers work-based learning programmes targeted at those employed in the IT sector.
Zenos is the largest training organisation of its type in the IT sector, with over 1,000 trainees on its programmes. It is based in Aynho in Oxfordshire, and operates 14 academies across the UK.
The vendors George and Sandra Anderson, who founded Zenos in1999, will continue their involvement in the business.
The £23 million debt package was arranged through a club deal split equally between Barclays Commercial Bank (Melorio’s and Zenos’ existing banker) and Clydesdale Bank. The debt package refinances Barclays’ existing debt facilities and funds consideration due on completion.
Alex Sheffield, Melorio Group finance director commented: “We are delighted with the support that we have received from Barclays, our incumbent, and Clydesdale, our new banking partner, in delivering funding for this acquisition in a particularly challenging market.
“Whilst Clydesdale had some knowledge of the group, their involvement in this acquisition from inception to exchange was just six weeks. Delivering the funding package in this timeframe in the current climate is a testament to the high quality of the teams from both our banking partners, and their diligent, yet commercial, approach, as well as to the strength of the underlying businesses within Melorio.”
David Hayers, director of Corporate and Structured Finance with Clydesdale Bank in London, said: “Clydesdale Bank is delighted to be able to provide new facilities, supporting both Melorio with its acquisition of Zenos and Barclays with the refinance of its existing facilities.
With this transaction, Melorio has acquired another company which is a clear leader in its sector. Zenos is an outstanding company and represents an excellent strategic acquisition. Melorio continues to build its presence in vocational training and is ideally placed to take advantage of the significant demand from companies to up-skill their employees, and the continuing cross-political party support for improving the UK’s skills base.”
Stewart McMillan, director in Barclays Commercial Bank Corporate Leverage Finance in London said: “We are delighted to be able to continue our support for Melorio plc, having enjoyed a relationship with the team since inception.
This will be the third acquisition funded by Barclays Commercial Bank, which emphasises our commitment to supporting customers in the delivery of their corporate strategy on a long term basis. The latest acquisition is a transformational deal and will bring with it enormous benefits to the existing group”.
Hammonds provided legal advice to Melorio while Pinsent Masons advised the banks.