Three Hills closes second dedicated impact investment in Operam Education Group

• Three Hills launched the Three Hills Impact Fund in January 2024
• The Article 9 SFDR fund employs thematic objectives aligned with the UN Sustainable Development Goals
• Current investor BGF has reinvested alongside Three Hills, providing significant financial and operational support for further growth

Three Hills, a private markets investment firm and certified B Corporation, is pleased to announce its investment in Operam Education Group (“Operam”), a leading education resourcing business headquartered in Manchester that provides temporary teaching and support staff to underserved schools across the United Kingdom.

This deal marks the second investment from Three Hills’ recently launched dedicated impact platform focused on providing flexible capital solutions to entrepreneur-owned businesses with impactful business models in the European middle market. Earlier this year, the Article 9 SFDR fund invested in Spanish software and AgriFood Technology specialist Hispatec (Grupo Hispatec Informática Empresarial).

Founded in 2017 by its current CEO Eddie Austin, Operam specialises in the acquisition and growth of education recruitment agencies and high-value service offerings, providing staffing solutions to state schools faced with the greatest need for flexible resources. The Group has grown rapidly since its inception, driven by the successful implementation of a buy-and-build strategy, with eight acquisitions completed to date.

With the UK education temporary resourcing market seeing continued demand, Operam is ideally positioned for further expansion. The market, valued at £1.2bn in 2023, is forecast to continue its strong growth trajectory, driven by an increasing shortfall in permanent teacher hires and rising staff absenteeism.

Three Hills will work closely with Operam’s experienced management team to cement the Group’s position as a clear market leader by driving further organic expansion. The transaction also provides significant further capacity for M&A. In this context, Operam will continue to actively target outstanding education recruitment agencies that are regional leaders and providers of other high value service offerings to schools.

The deal provides a successful exit for BGF, the UK’s most active growth capital investor in small- and medium-sized businesses. BGF originally backed Operam in February 2019 and has provided funding over multiple rounds to support the first phase of management’s ambitious buy-and-build strategy. BGF has reinvested in Operam and will work alongside Three Hills to help deliver the next stage of the company’s growth plan. To support the transaction, HSBC, Operam’s long-term banking partner, has also provided senior debt facilities.

Pablo Vélez, Partner at Three Hills, commented:

“We are excited to partner with Operam, an award-winning company that is both commercially successful and deeply committed to making a difference in the education sector. Operam’s strong leadership team, its established buy-and-build model, and its mission of supporting schools in underserved areas, align perfectly with our impact-driven investment thesis. We look forward to helping Eddie and his team expand Operam’s reach and impact through both organic growth and targeted acquisitions.”

Eddie Austin, CEO and Founder of Operam Education Group, added:

“This partnership with Three Hills marks an important milestone for Operam as we look to continue our growth journey and commitment to the UK’s education sector. Three Hills’ extensive experience and resources will be invaluable as we expand our service offerings and geographic footprint, allowing us to better support schools and students across the UK. Together, we are well-positioned to take the business to the next level while staying true to our mission of improving educational outcomes for the communities we serve.

“It’s important to recognise and thank BGF for their support over the past five and a half years. BGF’s ability to provide multiple rounds of funding and flexibility to react to changing market conditions has meant they have been the ideal partner for us, and I am pleased that we will be continuing the relationship.”

Rob Johnson, Investor at BGF, commented:

“Eddie and the team have rewritten the rule book when it comes to buy-and-build and I am delighted that we have been able to reach this landmark milestone on Operam’s growth journey together. Operam is a great example of the power of patient capital, an entrepreneurial vision and a market opportunity to do things differently.”

He added:

“I have no doubt the business will continue to go from strength-to-strength with the additional support of Three Hills.”

Debt Providers / Advisers on the deal were:

Banking: HSBC (Andrew Hyde & Ross Mather), Legals – Pinsent Masons (Tim Fearn)

Operam and Management: CF – KPMG (Giles Taylor, Ben Taylor, Sam Storey & Elli Bilous), Legals – Squire Patton Boggs (Paul Mann, Mae Salem, Tom Telford, Josh Lodge, David Parry, Josh Astill-Headley & Amelia Sharkey), VDD – GT (Bob McDermott & Andy Fowler)

Management: CF – DSW (Paul Herriott & Roger Esler), Tax – Tax Advisory Partnership (Russ Cahill)

Three Hills: Legals – DLA (Piero Carbone), M&A – Clearwater (Rob Burden), CDD – CIL (Mark Jeynes), FDD and Tax – RSM (Jonathan Wade, James Hunt), Political DD – Global Counsel (Matt Bevington), Insurance DD – Vista (Daniel Blake), Referencing – Confidas People (Bruce Douglas).

BGF: Legals – Addleshaw Goddard (Carly Gulliver, Chris England, Andrew Fordham & James Washington).

HSBC: Legals – Pinsent Masons (Tim Fearn)