SCP Private Equity Partners of the US, which has former prime minister Ehud Barak as a partner, has acquired the controlling interest in Anglo-Israeli distance learning company Q Group plc for $30 million. Founded in 1993, Q Group, was listed on the London Stock Exchange, before being acquired in 2000 by NIB Private Capital and Electra for $42 million, and delisted. SCP participated in the leveraged buy out of Q Group by its co-founder and CEO Meir Lebi, COO Tzahi Faina and Ran Oren. Lebi, Faina, and Oren will own 25% of the company, and SCP 75%, after investing $5 million. The deal is intended to free Q Group's founders and mangers from the company's previous shareholders, in order to expand its business in the US.
Lebi said Q Group's shareholders would definitely benefit from the deal and make a profit. "I cannot comment on the numbers, due to the confidentiality agreements, but the founders and previous shareholders have made several exits and have earned handsome profits from the company. Unquestionably, the price for the deal does not reflect a linear curve, and to the best of my knowledge, they're more than satisfied."
Lebi said Q Group was acquired because its previous shareholders were restricted from operating in the US market, but that changing requirements by the US Department of Education created an extraordinary business opportunity for Q Group.
Q Group had $9 million in revenue and an earnings before interest, taxes, depreciation, and amortization (EBITDA) of $2.2 million in 2002. In the past four months, the company signed two deals worth $3.5 million altogether, and it has a three-year orders backlog of $5 million.
SCP has $1 billion under management. SCP is run by managing general partner Winston J. Churchill and Israeli partner Yaron Eitan, a founder of Geotek Communications. To date, SCP has invested in Israeli funds Vertex Israel Management and a target=new href=http://www.vitalifevc.com/> Vitalife Life Sciences Venture Capital, and in Tecnomatix Technologies (Nasdaq: TCNO) six months ago.
Published by Globes [online] - www.globes.co.il - on February 16, 2004