Founded by Hugh Pitman in 1983, Coventry-based JHP operates a national network of 57 centres as well as delivering training in employees’ workplaces nationwide.

The business services more than 3,000 clients, from small and medium sized companies to major organisations such as the Ministry of Defence, RBS Insurance, Royal & Sun Alliance and Barclays. .

Led by chief executive officer Jim Chambers, its management team has acquired a minority shareholding while LDC, has invested £30 million for a significant majority stake.

A £26 million package of senior debt was provided by Yorkshire Bank.

Over the last three years, JHP has almost doubled sales to £44 million following successive contract wins, fuelled by rising demand from the public and private sectors and JHP’s commitment to high standards of service delivery.

The transaction will enable the company to capitalise on opportunities created by the ongoing consolidation in the skills and training services sector while continuing its organic growth strategy, particularly the increasing emphasis on welfare to work programmes.

Jim Chambers said: “We have delivered significant growth over the past few years as a result of increased commitment in the public and private sectors to tackling employment issues and skills gaps in the UK economy.

“The market in which we operate is consolidating and LDC’s investment will allow us to capitalise on potential opportunities to acquire strategically aligned businesses which expand our capabilities or geographical coverage, as well as continuing to grow organically.

“The investment comes at an important stage in our development and will bring on board the expertise and financial backing we need to grow the business further.”

The transaction was led by John Swarbrick, Alex Bowden and Tony Norwood of LDC. John Swarbrick and Alex Bowden will join the JHP board.

John Swarbrick, senior director at LDC in Leeds, said: “In JHP we are backing a socially responsible firm which has excellent prospects for growth thanks to a market-leading position, a highly capable management team, continued demand and an unrivalled reputation for quality of service.”

He added: “This transaction is consistent with our strategy of focused, through the cycle investment in commercial enterprises which are benefiting the UK economy.

“With skills and training at the top of the economic agenda, JHP is well placed to provide valuable solutions for employers and employees alike.”

This deal is LDC’s first in 2010 and follows on from a busy 2009 which saw LDC invest over £200 million in businesses with a total enterprise value in excess of £500 million.

With over 1,000 employees, JHP Group provides apprenticeship and train-to-gain programmes across England, Scotland and Wales through its ‘skills’ division. Its ‘employability’ division targets employment through a spread of dedicated public-funded programmes.

Ruth Cherry, director with Yorkshire Bank Corporate and Structured Finance added; "JHP is an important part of the UK's training and skills infrastructure which is fundamental to the efficient operation of the labour market. JHP's track record of delivery and standard of provision is second to none. Yorkshire Bank is delighted to support its development."

Deloitte, led by Dan Renton and Paul Trickett, together with Jonathan Jones of Hammonds advised LDC with due diligence undertaken by PwC and A4e Insight.  The vendors were advised by Rothschild and law firm Taylor Wessing provided legal support.

Dan Renton of Deloitte said: “While conditions generally in the economy remain challenging, this deal proves that great businesses with first class management teams remain attractive to investors like LDC who are able to see and focus on real growth opportunities. Bringing deep sector and transaction experience together, we are pleased to have been part of the Yorkshire deal team which structured and advised on this significant and swift investment.”

Stephen Griffiths, director at Rothschild, said: "The MBO of JHP represents an excellent opportunity for the management team and LDC to take forward a well established and market leading group in what is a dynamic and exciting sector. This deal is an excellent start to 2010 for M&A activity in Yorkshire.”

Advisors
Debt provider Yorkshire Bank (Ruth Cherry)

Advisors to LDC and Newco:
Deloitte (Paul Trickett) – corporate finance advisory
PWC (Nigel Ward) – financial due diligence
A4e Insight (Neil Stanworth) - commercial due diligence
Hammonds (Jonathan Jones) – legals and due diligence

Advisors to the vendor:
Rothschild (Stephen Griffiths) – corporate finance advisory
Taylor Wessing (Robert Fenner) - legals

Notes to editors:

1.    LDC (Lloyds TSB Development Capital) is part of the Lloyds Banking Group and is authorised and regulated by the Financial Services Authority.

2.    LDC has, since 1981, completed over 400 investments and has ongoing interests in over 60 businesses across the UK.3.    LDC back ambitious management teams from UK-based companies seeking between £2m and £100m of equity for management buy-outs, institutional buy-outs or development capital transactions.

4.    LDC invests in a broad range of sectors and has particular experience in financial services, healthcare, industrials, IT & software, leisure & media, retail & consumer, and support services.

5.     LDC is the leading private equity company in the UK mid-market.  Recent transactions include investments with 1ST – The Exchange, Ansa / Independent Inspections, Evander Group, Cranswick Pet & Aquatics, Modelzone, Nuclear Engineering Services Limited, Quantum Specials, and Snell Limited plus exits from ATP, ghd and Telecom Service Centres.

6.     LDC has fourteen offices – Aberdeen, Amsterdam, Birmingham, Bristol, Edinburgh, Hong Kong, Leeds, Liverpool, London, Manchester, Newcastle, Nottingham, Reading and Southampton.       

7.     For further information, visit www.ldc.co.uk