ESG formerly Sencia formerly Pelcombe being sold off

Submitted by Daniel on Thu, 02/04/2009 - 11:44am

Edit 3/4 - So this story is from last August, and Sovereign are still major shareholders in ESG. One of the dangers of doing newsletters at 4am is the occasional slip-up. Sorry!

From the Independent:

"Buyout group Sovereign Capital looks set to sell to management its majority stake in the Employability and Skills Group (ESG), which trains employees at 5,000 companies.

A team led by the chief executive, Adrian Holmes, is the frontrunner for the £80m stake, which was put up for sale by Sovereign adviser BDO Stoy Hayward at the start of the year."

Anyone want to suggest a new name for the company? Another rebranding seems like a grand idea...

Comments

Submitted by bigbaldbloke on Thu, 02/04/2009 - 4:35pm.

Just for clarity's sake, Sencia (formerly Pelcombe) is one part of the group. It also contains the Train to Gain/Apprenticeship providers STL, Triangle & Orient Gold.

Submitted by Anonymous on Thu, 02/04/2009 - 5:39pm.

On snother topic I heard that it was announced today that A4E and Reed have won big contracts in Australia - can you confirm?

Submitted by Anonymous on Thu, 02/04/2009 - 5:57pm.

Yes and Dering as well - see Newswire a couple of weeks back:

http://indusdelta.co.uk/newswire

Submitted by Anonymous on Fri, 03/04/2009 - 7:03am.

Job Services Australia results: http://www.workplace.gov.au/workplace/Publications/News/StreamServicesbyESA.htm

Reed have won the area south of the CBD in Melbourne and an area 25km east. Plus also a small town to the west of Brisbane.

A4e have won in Bondi (part of Sydney) and an area 500km north of Sydney.

My contact at Dering tells me they did not bid for this programme preferring to act as a subcontractor for deaf people but they are very happy with the results.

Submitted by Anonymous on Fri, 03/04/2009 - 7:14am.

I wonder if DWP are monitoring this?

Employment Service Holdings - the people who brought out PPDG seem to have lost over 50% of their contract areas. That could have a significant impact on fND if they are no longer able to finance the upfront costs...

Submitted by gazbaz100 on Fri, 03/04/2009 - 8:07am.

The ESG story relates back to August 08. Sovereign Capital are still the major shareholders so looks like the story is out of date.

Submitted by Anonymous on Fri, 03/04/2009 - 2:15pm.

This does not detract from the fact that Sovereign are still looking to sell the company! Any company with financial backing from venure capitalists or from Hedgefund managers runs the risk of financial troubles! Their share value is inflated and does not represent a true financial picture. It would be interesting to know how much "working capital" they actually have?

Submitted by Anonymous on Fri, 03/04/2009 - 9:23pm.

What does this mean for Sencia employees, is it secure or not?

Submitted by Daniel on Fri, 03/04/2009 - 10:33pm.

Provided ESG / Sencia is delivering what it should and making profits, there's no reason it should run into huge troubles. Even if Sovereign ran into problems, they could likely dispose of ESG as a functioning company. Even if something went hideously wrong, the normal DWP approach is to transfer contracts to someone who could continue to deliver them, along with the staff. TUPE is your friend!

Submitted by Anonymous on Sat, 04/04/2009 - 8:31pm.

Thanks Daniel.

Submitted by Anonymous on Wed, 15/04/2009 - 11:07am.

Sovereign are their Shareholders. Shareholdings are bought and sold ever day in thousands of companies so what makes this any different regardless of whether it is VC, PE, Bank Debt, listed shares, parent Company etc backed. The Financial Risk in the past economic conditions would have been no greater or lesser than any other provider. In the current financial climate it could be actually more low risk than some top 5 providers struggling to repay loans and failing to hit banking covenants as Banks seek to recoup their losses. Working Capital is an interesting comment - actually have or have access to is probably a more pertinent question and equally applicable to all providers bidding for fND especially those currently losing existing financial reserves on the delivery of Pathways to work. Correct me if I'm wrong but I was not aware they had shares listed which could be over valued?

Submitted by Anonymous (not verified) on Thu, 16/04/2009 - 8:55am.

Your correct, they do have not any shares that are listed making it very difficult to decipher what their current financial position is. There needs to be more scrutiny by DWP when analysing the financial position of welfare to work providers before they are officially awarded a contract. They are after all delivering a public service on behalf of the goovernment. The value of companies such as Sovereign are underpinned by the value of stocks and shares that have collapsed over the past 9 months hence the reason they have limited "working capital". Although not listed we do know that their financial stability has weakened over the past 9 months. The evidence for this is ESG and other assets are still up for sale! With regards to the statement "The Financial Risk in the past economic conditions would have been no greater or lesser than any other provider". How is this the case? The financial markets have collapsed limiting the working capital of the company (through shares and investments the Sovereign Group has bought in other companies. They are venture cpaitalists after all). Given it's financial composition this position is very precarious. You make an excellent point however. Other providers out there are in a similar position. Reserves are being lost rapidly due to Pathways to Work performance and the imminent results of fND will be very interesting. There could be another Carter & Carter situation around the corner.