Private equity firm backs growing apprenticeship business

A Leeds-based apprenticeship company has received backing from a private equity firm as it searches for further growth.

Palatine Private Equity has announced the third investment from its £100m Impact Fund with a stake of up to £10m in Estio Training, a provider of IT, digital and technology apprenticeships. Estio’s headcount currently stands at 120 and it is expected to more than double over the next three years.

The Leeds-based business offers 10 different apprenticeship programmes, including Data Analyst, Infrastructure Technician and Software Developer roles. Across its Leeds, Manchester and London sites, it currently has over 750 apprentices on programme.

Estio has developed a strong client base consisting of some of the UK’s biggest companies, including the likes of Santander, Asda and The Cooperative Group. It has also secured contracts with numerous NHS Trusts and Local Authority bodies throughout England.

The company aims to address the skills shortage in the UK IT sector by providing high quality training to both new entrants into the IT sector and existing staff developing new skills to match evolving technologies.

This is the third deal from Palatine Private Equity’s Impact Fund, a £100m investment vehicle targeting growth companies that also delivers a positive social and/or environmental impact.

With Palatine on board, the business is now planning to expand its geographic reach with a new Birmingham facility, and has set an ambitious target to increase the number of apprentices in training to over 2,000 over the next three years. Estio is in the process of doubling the size of its Leeds office, and has plans to expand existing facilities in Manchester and London.

The deal was led by partner and Head of the Impact Fund Beth Houghton and investment director James Gregson.

Robert Turner, Director at Estio, said: “The strong underlying demand for apprentices has been further boosted by the introduction of the Apprenticeship Levy in April 2017, which has had a huge impact on our business. We have ambitious plans to expand our geographical reach and strengthen our existing sites to accommodate more growth and see Palatine as a perfect fit for the business. Beth and team took the time to understand Estio and its ambitions, and have seen our potential to become the leading provider of digital and technology apprenticeships in the country.”

Beth Houghton, Partner at Palatine Impact, said: “Estio offers high quality technical training to people of all ages, and its programmes serve as a real alternative to university studies. The UK is suffering from a major skills gap in the IT and digital industry, and Estio is training and upskilling the next generation of workers in order to address this.

“The firm has already established a reputation for quality training in the North of England, with facilities in both Leeds and Manchester. Our goal is to grow the business on a national scale, with new facilities in Birmingham and London. We’re proud to support the team at Estio, and we’re looking forward to working with them towards achieving their ambitious targets.”

A team at Grant Thornton led by Corporate Partner Peter Terry assisted by Gemma Hardy, Cariad Mudford and Joe Pollard advised the founders on the investment deal.

Palatine Private Equity’s advisers were Chris Heatlie and Thomas Smith (BDO) on financial due diligence, Arun Kanwar and Sam Lecacheur (Cairneagle) provided commercial due diligence and Mike Stiles (The Quinn Partnership) provided management due diligence.

Legal advice for Palatine came from Andrew Green and Katie Parker (Addleshaw Goddard). Palatine structure and tax advice was provided by Colin Smyth and Tim Douglas (RSM).

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