Palatine's impact fund invests in Back2Work Group

Palatine Private Equity has completed the sixth investment from its Impact Fund, with the acquisition of a stake in a fast-growing training company which helps individuals return to employment and develop new skills.

Palatine’s returns-focused GBP100 million Impact Fund, which invests in profitable businesses making a positive impact on the environment or society, will now support Manchester-based Back2Work Group as it continues its growth plan.

Back2Work specialises in delivering intensive training courses to help the long-term unemployed return to work, retrain or re-skill. It also offers a digital marketing apprenticeship programme and runs on-line training courses for employed people to support career progression in sectors such as health and social care.

Founded in 2010 by Managing Director Luke Muscat and Chairman Tony Bailey, Back2Work has seen strong recent growth. On the back of a number of key long-term contract wins to deliver pre-employment training for the devolved Combined Authorities, annual revenues have risen to GBP11.5 million. As a result, Back2Work’s own headcount has increased to more than 140 employees, with the business now supporting more than 11,000 people with their training every year. 

The company works closely with companies in the warehousing, logistics, IT, digital, health and social care and construction sectors, which are all experiencing strong demand for staff, to help fill vacancies. Back2Work was also able to respond quickly to the logistical challenges of lockdown, switching from classroom-based face-to-face learning to online delivery within just two weeks.

James Gregson, Senior Investment Director for Palatine’s Impact Fund, says: “Back2Work is an excellent business delivering a clear social impact by helping people return to work and gain new skills. We are excited to be working with Luke and his dynamic team to build on the company’s strong recent growth and support the continued focus on employment outcomes and career progression.

Back2Work is a compelling investment for the Impact Fund with a highly relevant proposition as the UK adjusts to the impact of the Covid-19 pandemic which will inevitably create new requirements for retraining and up-skilling.”

Gregson adds: “With further devolution of adult education budgets on the horizon, we see strong potential for further organic growth across all parts of the business. Given the scale of the opportunity in the training sector and our track record in buy and build, we are also keen to consider potential acquisition opportunities.”

Following the investment, James Gregson and Palatine Investment Director James Painter are joining the board of Back2Work. Former Staffline Group plc and ITG Chair, Tracy Lewis will also join the business to provide further support to the management team.

Luke Muscat, Managing Director of Back2Work, says: “Since launching the business in 2011 B2W has always strived to deliver services that create a lasting impact, on the wellbeing, living standards and economic and environmental sustainability of the communities that we serve.”

“B2W supports individuals from a wide range of backgrounds to secure employment and to develop sustainable careers in growth sectors. It was imperative that we picked the right investment partner that shared our values and passion for social purpose. We are delighted to be starting the next stage of our journey with the Palatine Impact Fund and to have their unique expertise in Impact investing and ESG to support our future growth strategy”  

Palatine’s award-winning Impact Fund was launched in 2017 and invests in profitable, growing businesses making a positive impact on the environment or society. 

The returns-focused GBP100 million fund, one of the first dedicated to impact investments in the UK mid-market, supports management buyouts, growth capital and buy-and-build models, investing between £5m and £10m.

Clydesdale Yorkshire Bank (Stephen Gater and Mhairi Ruddy) provided banking support on the deal. 

Palatine's legal advice was provided by Kieran Toal and James Skivington at Pinsent Masons; financial advice was provided by Jodi Birkett at Deloitte; and commercial advice was provided by Arun Kanwar and Alfred Chambers at Cairneagle Associates. Quinn Partnership provided management advice and insurance advice was provided by Marsh.

Back2Work was advised by Rob Burden and Kieran Virr at Clearwater International, and Jim Truscott and Mark Lupton at Beyond Corporate provided legal advice.