The private equity firm TDR Capital has abandoned the £2.5 billion sale of a British education business after failing to find a buyer willing to pay the desired price.
TDR, which also owns Asda and David Lloyd Leisure, is now seeking to refinance BPP Holdings, a professional training course business, by securing a debt deal.
The firm appointed bankers from Houlihan Lokey and Morgan Stanley last summer to find a buyer for BPP, which runs courses for trainee lawyers and accountants. Several private equity firms, including CVC, Cinven and KKR, showed interest.
However, three sources close to those talks, including one potential buyer, blamed “political noise” in the UK, and business pessimism in the aftermath of the autumn budget, for the fact that no deal was reached. Some in the sector felt that TDR’s valuation of BPP was too high.
Industry sources said that investors would also have been concerned about the future demand of international students to enrol in UK universities. Last January, new rules came into place banning many foreign students from bringing family members with them to the UK.
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As well as selling its training services to firms such as Grant Thornton and Allen & Overy, BPP has its own private university.
TDR bought BPP, which was previously listed on the London Stock Exchange, for less than £700 million in 2021. Since then, it has made a series of acquisitions — many of them focused on overseas businesses — to bulk up the value of the firm.
The failure of the sale process comes at a challenging time for the British private equity firm, whose portfolio companies are heavily exposed to cost increases arising from the budget. Large employers are being hit by higher national insurance bills and a forthcoming rise in the minimum wage.
Three TDR-owned companies — Asda, pub group Stonegate, and David Lloyd — employ more than 170,000 people between them. Asda, which is losing market share to rivals, has said its national insurance bill will rise by £100 million next year.
TDR, Houlihan Lokey and Morgan Stanley declined to comment.
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