Shaw & Co supports Now Education on management buyout

Education staff supplier Now Education has completed a management buyout. The deal was advised upon by Shaw & Co, which provided corporate finance support.

Launched in 2010, Now Education is a supplier of staff to primary and secondary schools across England and Wales. The organisation sends around 1,600 staff to more than 800 schools – meaning it needs to recruit consistently across 20 regions. To meet this demand, Now Education has permanent offices in Birmingham, Cardiff, Leeds, Lincoln, Liverpool, London and Nottingham. Across this presence, Now Education has a team of nearly 40 consultants and ten back-office support staff.

Now Education has grown consistently since its inception with forecasted gross profit of £7.9 million for the 2023 financial year – figures that are predicted to double by 2027. However, at present, 95% of its business is from contract revenue with more than 75% of placements six weeks in length or longer – meaning it needs to keep expanding to keep up. As the firm looks to keep up with this heightened client need, and enter a new phase of growth in 2024, its senior team has moved to take control of the company.

A management buyout led by its co-founder and managing director, Alex Westworth, has seen Now Education bring on a major institutional investment from Prefequity. The £14 million backing values the business at £28 million.

Westworth, who takes on the role of CEO with Now Education, said, “This strategic MBO has empowered me and the rest of our shareholders to shape and drive the future growth of Now Education. This milestone marks the latest chapter in our growth story and Gary Redman will be there as Chair to support us with his wealth of experience in the recruitment sector.”

As part of the deal, Johnny Carew Pole, partner at Prefequity, joins the company’s board of directors. At the same time, Gary Redman – former majority shareholder and CEO – moves into the role of chair.

Redman noted,  “I am delighted that we have completed the MBO, working with a group of advisers and investors to achieve what is a highly successful outcome for all parties. I am also pleased that I will still have a part to play in shaping the future of Now Education.  Alex Westworth is an extraordinary and capable leader who will take the business to the next stage of its journey. We have built a company with a unique structure and shareholding offering and we have some incredible people at all levels. I look forward to helping the business grow even further.”

Looking ahead, Now Education hopes that the management buyout will provide a platform from which to continue the company’s impressive growth. To do so, it will leverage an innovative shared equity model that sees proven and successful consultants fully supported in launching their own Now Education offices in new regions across the UK.

Speaking on the plan, Prefequity’s Johnny Carew Pole added, “We are delighted that Prefequity’s flexible capital will support Alex and team in their management buyout and also fuel Now Education’s continued growth. Now’s business model allows it to attract and retain exceptional talent, enabling it to deliver excellent value and service for schools, As a result, Now is well-positioned to cement its place as a leading player in the market.”

The deal was advised upon by a number of professional services entities. Freeths provided legal advice to the management team on the deal while Wilkes and Ward Hadaway provided legal advice to Gary Redman and Prefequity respectively. Additional support for working capital was provided by Lloyds Bank via its invoice discounting facility. And consultants from Shaw & Co provided corporate finance advice on the deal.

Rob Starr, a partner in M&A at Shaw & Co, commented, “This deal has provided the ideal outcome for all stakeholders. With Alex at the helm and significant backing from Prefequity, the company has the strongest of foundations for its next stage of growth. Gary, meanwhile, will be able to enjoy the rewards of his many years of hard work while also playing an important role in taking the business forward.”