Melrose Education secures loan to pursue a targeted buy and build

OakNorth Bank has provided growth capital to Innervation Capital Partners, to support the “buy and build” strategy of its newly-launched Special Educational Needs (SEN) provider, Melrose Education.

Innervation Capital focuses on investing in platform companies in essential services sectors such as education. It then works closely with the management team to accelerate growth through a mixture of organic and inorganic growth. In 2017, OakNorth Bank provided support to ICP Nurseries, and in 2019, did the same with Cresswell Nurseries – both were Innervation Capital-backed businesses.

ICP Nurseries and Cresswell Nurseries were combined to form ICP Education in December 2020.  Under the leadership of chief exec, Tracey Storey, ICP Education operated 45 sites and served nearly 6,000 children. The group is one of the highest quality large nursery operators in England, with a third of nurseries rated Ofsted Outstanding and 98% rated Outstanding or Good.

In addition, last year ICP Education was ranked as the 14th Best Place to Work in the UK by Glassdoor, and Tracey Storey was personally named as the seventh best chief exec to work for during the pandemic.

In June 2021, Innervation Capital announced the sale of ICP Education to Oakley Capital IV, and it now intends to replicate that success in nurseries in SEN schools via its recently-launched entity, Melrose Education.

Melrose initiated its “buy and build” strategy with the acquisition of Orchard Education, an independent special school in Grimsby with expertise in supporting learners with Autism, ADHD or more general Social, Emotional and Mental Health needs (SEMH). The school is led by principal Mike Burton, who has become director of operations of Melrose Education following completion of the acquisition, with Tracey Storey as executive chair. Melrose Education has also recently acquired Break Through School in Belvedere, Kent, a small alternative independent school offering a personalised and well-rounded approach to education to young people aged 11-17.

Commenting on the transaction, Tracey Storey, executive chair of Melrose Education, said: “Our aim with Melrose Education is to create one of the UK’s leading independent Special Educational Needs providers in what is a £7B, fragmented market, serving 430,000 children with Education & Health Care Plans (“EHCP”). We expect to complete another 1-2 acquisitions this year with many more to come, so are delighted to have the support of OakNorth Bank once again. The bespoke facility the team designed for us in 2017 played a vital role in the incredible growth and success of ICP Education, which culminated in its sale to Oakley Capital last year.”

Stuart Blair, director of Debt Finance at OakNorth Bank, commented: “Tracey has been instrumental to the standout performance of ICP Education, so we jumped at the opportunity to work with her and Innervation Capital again. Between them, Tracey and Mike have almost four decades of experience in the education sector, so understand the unique dynamics of it, and will no doubt be able to build Melrose Education into the success story that ICP Education has become.”

Date published: January 24, 2022