Energy Training Partners Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Acquisition Criteria:

Training and education field, serving corporate clients in both soft and hard skills, but with a general focus on soft skills such as operations, compliance, safety
A strong presence in new vertical segment markets outside energy, such as automotive, governmental, industrial
U.S. based, preferably in the Eastern U.S. for ease of management
Management is willing to remain in place; committed to expand the company
Under $50 MM in enterprise value
Preferably a private company

Size Criteria:

$100 MM - $200 MM in enterprise value
Provides at least $50 MM in revenues
U.S. based, preferably in the Eastern U.S. for ease of management
Management is willing to remain in place, committed to expand the company
Under $50 MM in enterprise value
Preferably a private company

GP Strategies Corporation

GP Strategies Corporation (GPX) is a global performance improvement solutions’ provider of sales and technical training, e-learning solutions, management consulting, and engineering services. Clients include Fortune 500 companies in multiple sectors, including manufacturing, process, and energy industries; and other commercial and industrial sectors. GPX also has a growing training relationship with the U.S. government. Programs have been developed for service managers and executives, engineers, sales associates, plant operators, maintenance and purchasing workforces as well as information technology professionals in the public and private sectors in North and South America, Europe and Asia. GPX provides both standardized and customized training programs, typically at client’s facilities.

Additional information about GPX including: people in key management positions, levels of training, business strategy, management projections, historical company performance, market performance, selected historical valuation metrics, ownership summary, and trading volume distribution is as follows:

GPX Management

Scott Greenberg CEO: Annual Compensation: $1.2 MM - Scott has served as the CEO of GPX for six years, with a range of previous experience as CEO of several small cap public companies.

Doug Sharp (President): Annual Compensation: $650,000 - Doug has spent his career in industrial training and development, serving as head of Human Resources in several Fortune 500 companies prior to joining GPX. Doug has been in this position for 14 years.

Sharon Mayer (CFO): Annual Compensation: $450,000 - Sharon has been the CFO of GPX for 8 years, promoted to that position from Treasurer. Sharon has experience of ten years in public auditing, and was GPX's outside auditor prior to being hired as treasurer. Sharon has expanded her responsibilities to include investor relations.

GPX Levels of Training

GP Strategies Corporation provides customized training solutions focused on performance improvement initiatives primarily in the United States and the UK. It operates in five segments as below:

Learning Solutions,
Professional & Technical Services,
Sandy Training & Marketing,
Performance Readiness Solutions, and
Energy Services.

The Energy Services segment provides engineering services, products, and training primarily to electric power utilities.

GPX Business Strategy

GPX is the largest public company in the U.S., which is exclusively focused on corporate training. GPX has traditionally grown through small add-on acquisitions, with limited organic growth.

Currently corporate training is a $3.5 Billion industry, primarily served internally by HR departments within corporations. Outsourced training – using a third party external supplier to provide training – is a small but growing concept; currently only 10% of total services are provided. Most training companies are very small, with an average of five employees per company.

GPX has engaged in a diversification strategy in the training sector; hence it has expanded into diverse areas including operational training, sales training, and financial training. The largest customer concentration of the company is with General Motors (GM). GM’s sales training is currently 15% of annual sales.

While a growing sector, third party training is a highly cyclical business. In poor economic cycles, training budgets are among the first to be cut. Often outside providers face initial cuts as HR departments focus on protecting their own staff.

In the next several sections, we will examine GPX financial data including: management projections, historical company performance, market performance, historical valuation metrics, ownership summary, and trading volume distribution.

GPX Management Projections

GPX Historical Company Performance

GPX has performed well financially over the past three years, with significant growth in revenues and EBITDA. To help you visualize, click on the arrows below to navigate through the content.

The following graph illustrates data for GPX's financial performance from 2005 to 2007.

The following graph illustrates data for GPX's three-year stock performance from 2004 through 2007. GPX has generally performed slightly below its peer group, but ahead of some of the most poorly performing equities...................................

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