Relevant Document:Financial Report FY’20
Direct lenders are awaiting feedback following a lender education for the sale of U.K. educational assessments provider GL Education, sources told Reorg. Investment bank Baird is running the process and the deadline for the first round of bids is Feb. 23.
The group is being marketed off EBITDA of £34 million for 2022 and is expecting a valuation multiple of about 15x, sources said. Direct lenders are angling to provide a unitranche at about 6x leverage, sources said. Although U.K. schools were closed during lockdown periods and the group’s year-over-year growth was flat, GL Education is a cash generative business and the sector is attractive, sources said.
In 2020, the company’s reported revenue stood at £39.5 million, up from £38.9 million a year earlier. Overall management reported EBITDA grew 5.5% to £23.6 million before exceptionals and loss on disposal, according to its financial report. The group’s consolidated loss before taxation was £6.7 million after a loss on disposal of £4 million. Cash from operations was £14.1 million.
The company used the U.K. government’s furlough scheme to reduce wage levels during the months of negative sales impact and had no redundancies in the period, according to its report.
In February 2020, the group carried out a refinancing and increased its facility term loan B debt from £72.5 million to £110 million. The loan matures on March 27, 2025 and pays between 3.5% and 4.50% over LIBOR. As of Dec 31, 2020, total borrowings were £128.1 million, including secured subordinated loan notes of £20 million lent to GLE Midco Ltd., due on June 8, 2022, paying 8.62%. IFRS 16 lease liabilities amounted to £2.3 million. The group also has a committed £12 million RCF with its senior lenders, which was undrawn as of Dec 31, 2020, and together with cash of £10.8 million amounts to total available liquidity of £22.8 million at year-end 2020.
Private equity firm Levine Leichtman Capital Partners acquired GL Education alongside its management team in 2016, according to a
statement at the time. The valuation multiple of the acquisition was between 14x and 15x, sources said.
In Sept. 2020, the company sold digital curriculum content
Boardworks due to a strategic decision to withdraw from the U.K. educational content market to focus on its core assessment capabilities. GL Education retained similar operations in the U.S. and other international markets, according to its financial report.
Founded in 1980, GL Education provides formative educational assessments to measure student ability and progress. The company has its headquarters in London and delivers its portfolio of published tests in print and digital formats.
Levine Leichtman Capital Partners and Baird did not reply to Reorg’s request for comment at the time of the publication.
--Lucía Camblor