Coventry-based ParentPay, which provides payments systems to the education market in the UK, the Netherlands and Germany, has completed its acquisition of Education Software Solutions from Montagu Private Equity.
The deal that makes the enlarged group the UK’s largest education technology business.
The deal was completed after the merger was approved by the Competition and Markets Authority (CMA).
Private Equity company Montagu acquired ESS from Capita at the beginning of this year, with the intention of merging the business with ParentPay once the CMA had given its approval.
ParentPay started the cashless payment revolution in schools in 2004, and has since simplified the lives of millions of parents and streamlined the payment operations of thousands of schools by removing cash from the classroom.
Following the acquisition of ESS, ParentPay can now offer its customers a much wider range of products including SIMS, the UK’s leading education management information system, and ESS Reading Cloud. The transaction also marks ParentPay’s entry into the further and higher education sector and libraries, through the acquisition of ESS’ UNIT-e and LMC software solutions.
ParentPay will continue to offer its payment collection, parental engagement and meal management solutions to schools, their pupils, parents and teachers, and caterers, and expects to expand its customer base, which already covers six million pupils, as a result of this acquisition.
The acquisition is backed by Montagu, a leading European private equity firm, which will take a significant minority interest in the ParentPay Group as part of the deal.
Mark Brant continues as CEO, with Clint Wilson and Andrew Neubauer remaining in their roles as Group Corporate Development Director and Executive Chairman respectively.
Mark said: “This marks the coming together of ParentPay and ESS, two well-known and established ed-tech businesses with highly complementary products, people and values. Our customers trust us to deliver quality products and services and we maintain and earn that trust by continuing to innovate for them in response to their needs. This deal means that our customers can now look forward to accelerated product development and in due course a seamless integration of ESS and ParentPay products.
“While I am delighted as to what the deal means for our customers, I am equally excited by the career development opportunities it represents for our valued employees.”
Clint Wilson, Group Corporate Development Director at ParentPay, added: “It has been so satisfying to see ParentPay grow from an idea hatched by a former teacher almost 20 years ago to the position it is in today. The inspiration to find a solution to children carrying cash to school in their pockets has led to ParentPay becoming the UK’s leading ed-tech business.
“Throughout this remarkable journey, we’ve never compromised our core ethos or values. We were driven by a desire to make life easier for families while freeing schools from the burden of unnecessary administration, and this acquisition will help us further live up to these ideals.”
Andrew Neubauer, Chairman of ParentPay, said: “ESS is a gem of a business that was unduly neglected by Capita in recent years. Our job is to re-affirm ESS as the leading UK developer of MIS for schools and demonstrate to customers that ESS can match the standards of service, delivery and reliability for which ParentPay is widely admired.
“As a privately owned business, for the past 16 years ParentPay has been able to reinvest virtually every penny it has made back into its business. By remaining privately owned, we are free to continue that policy post acquisition. As a result, we expect to invest over £40 million into ESS development in the next 4 years, allowing us to deliver world class integrated solutions that will make a genuine difference to education outcomes in schools.”
Edward Shuckburgh, Director at Montagu, added: “With complementary products and a shared vision, ParentPay’s merger with ESS will enable the enlarged group to really drive forward innovation to the benefit of its customer base. We look forward to partnering with them on this journey.”
The deal is the latest in a line of strategic mergers and acquisitions that have, along with strong organic growth, enabled ParentPay Group to establish market-leading positions: Between 2017 and 2021, Schoolcomms, Cypad, WIS in the Netherlands and three school meal and payment management businesses in Germany all joined the ParentPay Group. In 2016, the Group launched nimbl, the pre-paid app and debit card for children and young adults, and in 2018 launched Just Education, its digital platform for supply teachers.