Ontario Teachers’ buys UK schools from private equity

The private capital arm of the $87.4 billion Ontario Teachers’ Pension Plan (OTPP) has acquired a UK special education and fostering services provider believed to be valued at about £200 million ($326 million).

Teachers’ Private Capital completed its acquisition of Acorn Care and Education, a provider of special needs school and independent fostering services, from private equity firm Phoenix Equity Partners, a UK middle-market private equity firm, OTPP announced.

Both the OTTP and Phoenix refused to disclose the amount the Teachers’ Private Capital paid for Acorn.

Phoenix bought a controlling stake in Acorn in 2005 when the company was valued at about $32.6 million, according to UK newspaper The Times.

The firm then primed Acorn with $81.5 million to fund the acquisition of 11 schools, increasing its market value to about $326 million, The Times reported when Phoenix began courting potential buyers in August 2009. Acorn now runs 10 special education schools in the UK, in addition to foster care services.

Ben Hewetson, head of the Teachers’ Private Capital unit in London, said the firm aimed to supply “flexible and patient capital” to provide “certain and appropriate investment support over the coming years to allow Acorn to take advantage of multiple growth opportunities”.

The portfolio managed by Teachers’ Private Capital was valued at $9.9 billion on December 31, 2008, and held more than 300 investments. The division staffs 50 people responsible for originating, executing and managing large investments, according to the OTPP website.