EIS-backed turnaround delivers 75x investment return in five years

An Enterprise Investment Scheme that backed an online learning business has given investors a 75x return on their money in a little over five years.

The Par Syndicate, a business angel network established by Edinburgh-based venture capital firm Par Equity, acquired Glasgow International Correspondence Schools in late 2012. It has just been sold to a private equity backed MBO.

Although it was a long-established “distance learning” specialist, ICS Learn (as it became known) had an uncertain future. The company was refocused and has experienced five years of growth, transforming itself into a fully fledged online education provider and an innovator with virtual learning environments. The company caters for more than 15,000 online students around the globe.

Par Equity Managing Partner Paul Munn said: “The total return for an initial £1,000 investment is over 75x on a pre-tax basis and over 100x if you take EIS reliefs into account.

“So, this is a huge success story for all concerned – for the investors, for the company and its employees and for the thousands of students who use ICS Learn to build their skills.

“It demonstrates the power of EIS and the importance of releasing capital to finance and develop promising UK businesses, particularly those in knowledge-intensive sectors.”

Munn added: “Having achieved a significant transformation of the business, we saw there was a clear opportunity for a strong exit.

“On balance, although the board did weigh the potential to continue to operate and grow the business, it was felt that new owners would better support further expansion.

“We exited in the knowledge that ICS Learn is now a leading provider in every sector that it focuses on and the fastest-growing online education business in the country.

“Par Equity has now invested over £50 million in 45 companies, the sale of ICS Learn brings the number of exits for Par Equity investors to 12 (both positive and negative). These twelve exits have generated aggregate proceeds of £38.0 million on investment of £7.8 million, representing a cash-on-cash multiple of 4.9x and a realised IRR of 41%.”