Deal Snapshot: TPC Training

TPC Training (TPC) is a leading provider of workforce training, performance management, and environmental, health, and safety (EHS) compliance software solutions for industrial and highly regulated end markets. Harris Williams recently advised TPC, a portfolio company of Frontenac Company, on its sale to American Safety Council (ASC).

Here, professionals from the Harris Williams Technology and Business Services Groups share insights on why the sector is attractive, what made TPC an excellent investment opportunity, and what buyers and investors interested in workforce training, development, and compliance solutions should consider.

What makes workforce development an appealing space for buyers and investors?

Leed: Industrial workforce training and development is a large and expanding market underpinned by strong tailwinds, including a widening skills gap across the workforce and an increasing worker shortage in high-demand industrial jobs. In 2020, manufacturers found nearly 50 percent of open positions difficult to fill due to skill mismatches, up from 34 percent two years prior.[i] Based on current trajectories, an estimated 2.1 million U.S. manufacturing jobs will be unfilled by 2030 due to the skill supply deficit.[ii] These challenges drive organizations to invest heavily in enterprise-wide training initiatives to re-skill employees and attract and retain talent.

Szyndlar: A growing focus on environmental, health, and safety is another strong tailwind. Worker safety and regulatory compliance are strategic imperatives for organizations across a wide range of industries. Companies are mandating skills and safety training to ensure a safer workplace, and these policies often require integrated software and monitoring tools to efficiently ensure compliance with regulatory requirements.

Lewis: The proliferation of digital learning is a key market growth driver. Corporate training is rapidly shifting to digital and hybrid learning models, a trend that has accelerated due to the COVID-19 pandemic. Changing learning preferences are also driving the digital shift. Tech-savvy workforces expect to be trained with digital learning tools, and technology advancements support more experiential learning, specifically mobile and simulated learning that make training more accessible and effective.

 

[i]Creating pathways for tomorrow’s workforce today,” Deloitte, May 4, 2021 
[ii] ibid

What made TPC particularly appealing to investors?

Titterington: TPC offers one of the industry’s broadest libraries of industrial skills and regulatory approved safety content that enables workers to advance in their careers and organizations to operate safely and more efficiently. Its products include digital skills and safety training across general maintenance, electrical, mechanical, and plant management operations delivered both asynchronously online or by TPC instructors in a virtual or in-person environment. The company also offers certifications that qualify professionals across industrial and food and beverage industries to operate safely and within compliance standards. TPC’s extensive content and mix of learning modalities allow organizations to provide their professionals with new skills, increase productivity, and create a safer, more compliant workforce.

de Fiebre: TPC is also on the forefront of personalized learning. It has the industry’s most advanced, cloud-based simulation training library and provides intuitive, hands-on, real-world learning experiences through immersive 3D simulations. This experiential learning gives employees confidence in their ability to troubleshoot quickly and effectively on the job. It’s more cost-effective for companies than physical training and a safe way to teach high-risk skills.

Szyndlar: Increased tracking, reporting, and auditing requirements associated with workforce safety policies are driving adoption of technology that can simplify complex compliance management responsibilities. TPC also offers companies an integrated learning management system (LMS) and EHS software to track, report, and manage compliance and safety. The platform serves as a system of record for skills training and verification, safety training, contractor certification, performance management, and enterprise-wide compliance.

Leed: TPC’s growth also made it attractive to investors. The company has multiple avenues to accelerate organic growth, including a large and growing new customer pipeline and a significant embedded cross-sell opportunity. In addition, it operates within a large and fragmented market that is ripe for continued M&A. The combination of TPC and ASC creates a true platform for consolidation and an acquirer of choice in the market.

What advice do you have for prospective buyers interested in this space?

Szyndlar: Some companies are taking advantage of the trend toward virtual and digital learning more than others. Attractive assets will have a meaningful percentage of their revenue from digital offerings. A winner in the space can offer hybrid learning options, including personalized e-learning and simulations, as well as integrated virtual and in-person instructor-led training. TPC can do it all, which better empowers it to address each of its customer's unique challenges, efficiently and at scale.

de Fiebre: I would also look for assets primarily selling direct to business and enterprise customers. Industrial enterprise customers are typically on long-term contracts, which provide strong revenue visibility and the opportunity to address additional customer challenges over time. This combines to drive strong retention and growth with existing customers.

Titterington: Brand trust is critical. Enterprises will choose industrial training companies with courses they trust to meet the certification requirements mandated by the government. There is a complex and expanding matrix of regulatory approvals (federal, state, and local) that industrial companies must meet. They want to work with training organizations that deliver coursework that satisfies those requirements. This is a significant barrier to entry for new companies trying to enter the market, and a source of competitive differentiation for those that have an established library of regulatory-approved content.

Leed: This is a rapidly growing yet fragmented market with demand driven by strong and sustainable tailwinds. Companies that can deliver a best-in-class, engaging learning experience at scale while delivering integrated software and compliance tools will win in this market.

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The Harris Williams Technology Group advises leading private and public companies, founders, and private equity, growth equity and venture capital firms on mergers and acquisitions and capital-raising transactions worldwide. The Technology Group has deep domain expertise in software and technology-enabled services and dedicated focus areas across a variety of vertical software applications and end-markets. 

The Harris Williams Business Services Group has experience advising companies that provide a range of commercial, industrial, and professional services. For more information on the firm’s Business Services Group and other recent transactions, visit the Business Services Group’s section of the Harris Williams website.

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