From its humble beginnings delivering correspondence courses for computer training in the mid-1980s, the Malvern group has blossomed into an international business, serving thousands of students around the globe with a variety of professional qualifications. Now, with a £2.6m growth loan from BOOST&Co, which could be followed by up to £4m of acquisition finance, Malvern has the opportunity to increase its working capital while its leadership team makes plans for future expansion.
Malvern, which has a registered office in Milton Keynes, delivers a wide range of courses from its dedicated schools in the UK, Singapore and Malaysia. These mostly focus on the English language for specific groups of professionals – English for Law or English for Nurses, for example – but the full directory encompasses security courses, accountancy qualifications, undergraduate and postgraduate certifications and even bachelor’s degrees.
The company has been listed on the Alternative Investment Market (AIM) of the London Stock Exchange since 2004, but the introduction of a new leadership team in 2016 is behind Malvern’s more recent success. Its fresh vision and leadership strategy has enabled the company to make several savvy acquisitions in Singapore, Manchester and Brighton, as well as becoming a delivery partner to the University of East London.
The result is a rejuvenated brand that is highly disruptive in a competitive education sector, says principal Lauren Couch, the head of BOOST&Co’s Bristol office, who led the deal. “Malvern is constantly looking at different and innovative ways to build up its revenue stream,” she says. “Rather than simply waiting for students to turn up and book, the business has expanded into partnership qualifications with major accountancy firms and foundation degrees with universities, and is continually investing in digital capabilities to differentiate itself from the competition.”
Future-proofed financial support
The initial £2.6m tranche of the loan from BOOST&Co will increase Malvern’s working capital, enabling the business to invest immediately in expansion. Plans include enrolling students on courses at Malvern House, Brighton – an English-language school that opened recently in the city. A further £4m in funding is available to the business for strategic acquisitions, if the management team requires it.
“Our aim is not only to support Malvern right now, but also to make sure that the company has a commitment from BOOST&Co for the future,” Couch says. “Having built a strong relationship with Malvern’s team, we know that decision-making is one of their strengths. They have shown that they have a deep understanding of their market, so we want to empower them to move quickly when they see an opportunity that fits their strategy, rather than having to go through the process of raising funds again.”
“We are pleased with the support we have received from BOOST&Co,” says Sam Malafeh, Malvern’s chief executive. “The loan will provide additional cash to support our continuing growth and strategic development, and will also enable us to accelerate the roll-out of some of our new products.”
Global vision trumps political turmoil
Amid the ongoing turmoil of the UK’s Brexit negotiations, there are many reports of investors pulling out of deals, so an international school with multinational students and employees might be considered too high-risk by some lenders. But Couch says that BOOST&Co’s confidence in supporting Malvern is a nod to strong references from customers and the firm’s ability to accurately assess risk.
“Malvern operates on a booking-by-booking basis, so we have high visibility of its revenue streams. This, alongside thorough assessment by our in-house analysts and the due diligence team at BDO, means that we’re comfortable with our decision to support the business,” she says. “I think this shows that we’re always happy to invest in the right businesses – the ones that are a good fit for BOOST&Co.”
Daniel Bond, a director in BDO’s Bristol office, was “delighted to support Malvern’s management team and BOOST&Co in this successful financing”, he says. “The UK remains a highly attractive location for international students seeking to continue their studies into further education, and the funding will help Malvern to take advantage of opportunities in its markets. It was great to work with Lauren on this transaction and we look forward to working with her and BOOST&Co in the future.”
Malvern’s international presence is key to the company – a fact that is even reflected in the legal process required to complete the deal. With requirements to be met in both the UK and Singapore, where Malvern is listed, the complex but successful process – carried out by Osborne Clarke’s Bristol office – demonstrates BOOST&Co’s capability to take on international companies, as long as they are the right fit for the business.