A syndicate of high-profile Scottish investors has stepped in to rescue Glasgow-based distance learning company International Correspondence Schools (ICS), saving 50 jobs and securing continuity of study for 14,000 people, mostly based in the UK.
The purchase, believed to have been for around £500,000, was brokered by the Edinburgh venture capital and angel investment firm, Par Equity.
The owners, to be known as Clyde Education Limited, will be chaired by the publishing and recycling entrepreneur Angus MacDonald, who has a 45% stake in the new business. He has pledged an aggressive investment and growth programme, starting with a relaunch of its product offering early in the new year.
ICS was bought from German publishing giant Cornelsen, which had owned it since 2008. The leading investors with board positions are Sir Tim Noble, former chairman of the Noble Group and David Alexander, an Edinburgh-based entrepreneur and investor specialising in new media. Par Equity, whose partner, Paul Munn, assembled the team, has an option to buy a 20% stake.
MacDonald told the Sunday Herald: "I buy into companies in growth areas that have lacked a real focus and recruit the right people and make sure they have the finance they need. ICS has huge growth potential. The English-speaking educational market is a mammoth market."
The sale, completed last week, follows a strategic decision by Berlin-based Cornelsen to exit the UK market following increased pressure on its core domestic distance-learning concerns. A year-long search for buyers raised the possibility of closure, loss of jobs and curtailment of courses.
Munn said: "This was not a straightforward investment deal, as the company needs work as well as investment. Par Equity is known for being hands-on and pro-active and active investors, as are the individuals in this deal. This is a team that is going to roll their sleeves up and get to work."
Asked about the new team's strategic priorities, Munn said: "It is still early days. There is a lot of opportunity in the education sector; there's a lot of change going on and a lot of investment from Government and the private sector as they try to drive a better educated workforce, and look for new ways to deliver that. With ICS there is a lot of experience there, as well as an understanding of the need to move forward. "
Munn said the business was "very UK-centric", with more than 90% of its enrolled students in the home market. He said the new owners would concentrate on consolidating the firm's UK operation, but added that "this doesn't mean that we can't deliver services and education [abroad] in the future".
He said that the typical ICS learner tended to be female, aged between 19-30, often seeking qualifications after a break from work, or seeking to upgrade skills to get back into the workforce.
Based at Skypark in Finnieston, ICS currently delivers a range of distance learning courses to more than 14,000 students. Founded in London in 1890 and based in Glasgow since the 1950s, the firm is credited with pioneering widened access to education through distance learning, a concept that has blossomed in the age of the internet.
Accredited by 22 examination bodies, it currently offers more than 200 flexible courses, ranging from school-level qualifications to vocational and college courses, plus professional qualifications such as those offered by the Chartered Institute of Personnel and Development. In its 120 years, it claims to have helped educate more than 13 million people.
Julie Hepburn, education services director for ICS, said: "The new ownership will allow ICS to take the next step forward. The syndicate has a wealth of experience in terms of marketing, technology and expertise and we know there are improvements in our product and service delivery we can make. The experience of Par Equity and the syndicate they back will allow us to achieve those aims more quickly and effectively."
One of Scotland's most successful entrepreneurs, MacDonald is part-owner of the Aim-listed biomass firm Helius Energy. He sold his online City publication, eFinancialNews and its associated jobs service, eFinancialCareers, in 2006 and 2007 to Dow Jones and Dice for a combined sum of around £80 million.
Par Equity is an investment boutique with a network of investors primarily based in Scotland and investing either as Par Syndicate, an informal investor group, or Par Innovation Fund I LP, a venture capital fund. The company focuses on new technologies, including media and internet. Clyde Education is its 19th investment since it began investing in 2009 in a portfolio distributed across the UK and Ireland which includes the professional social network website Kiltr, and in-house music streaming firm, Simple Audio.