THE DIVESTMENT CAMPAIGN
Our Client – The Vendor
Founded in 2006, Practical Outcomes is an established and award-winning Registered Training Organisation located in Victoria. It offers a range of market-leading training courses – provided via a unique face-to-face workplace-based delivery method – to the children’s services, hospitality, and aged care and disability sectors. Over time the Business has successfully diversified its revenue streams across those industry sectors, selectively leveraging its experience to enter new markets as the focus of government funding for training and education has evolved. This strategy has delivered high levels of year on year revenue growth (approx. 35%) and strong EBIT margins.
The business model is based on the provision of proprietary training materials and delivery methods to businesses and individuals by a permanent staff of highly qualified trainers. The Business is run under a management structure overseeing a team of about 30 staff. Its revenues are comprised of government funding payments, student fees, non-subsidised training fees and consulting fees. In 2015 the founding directors sought to exit the business and focus their energy and resources towards the pursuit of other commercial interests. They engaged Johnsons Corporate as specialists in mid-market business sales to undertake a national divestment campaign on their behalf.
The Business Sales Strategy
For an acquirer Practical Outcomes had many attractive features to support its ongoing profitability. These included: a loyal customer base, high levels of repeat business, a strong management team, an ability to develop proprietary training and train-the-trainer programs, and strong potential for future growth – into new government-funded market sectors, into new geographic markets, and/or through expanding its online delivery of short courses.
Johnsons Corporate’s custom research & marketing focused on a related Australian businesses specialising in one or more of the Childcare, Aged Care and/or Health Services sectors. Johnsons ran a proactive direct marketing campaign that uncovered 31 qualified, interested parties. Further vetting and negotiations resulted in the selection of a preferred buyer as well as a backup buyer, with Offer and Acceptance secured within 12 weeks of going to market.
(Read more about how using a Specialised Mid-Market Business Broker Approach to selling your business could get you a better outcome – just like our client).
The Strategic Trade Buyer
The Careers Training Group is a leading supplier of quality vocational education in Australia that sought significant expansion through acquisitions in the vocational training sector. It specialises in the provision of Certificate, Diploma and Advanced Diploma training, both on-campus and in the workplace, and educates over 5,000 students annually.