Transactional activity

2025 was a pivotal time for corporate activity, takeovers, and mergers in the independent school sector.

At the start of the year, Outcomes First Group (OFG) acquired five schools from Chatsworth Schools, facilitating OFG’s founding of Blenheim Schools, a new division focused on inclusive, high-quality, non-selective education. In March, EQT and a global consortium - including CPP Investments, Neuberger Berman, Corporación Financiera Alba, and Dubai Holding - announced the $14.5 billion acquisition of Nord Anglia Education, which operates over 80 schools in 33 countries, educating over 90,000 students. The deal supports Nord Anglia’s personalised learning model and global expansion as a leader in premium international education. In April, Blenheim Schools acquired Oxford Montessori Schools, and in September, it acquired an additional 12 UK schools from Cognita, significantly expanding its national footprint.

As schools sought stability, 2025 saw an exceptional increase in the number of mergers throughout the year. Box Hill School in Dorking joined the Reigate Grammar School Group (rebranded as RGS Surrey Hills), St Hugh’s School in Woodhall Spa merged with The Repton Family of Schools, and Oakfield Prep School in West Dulwich joined Alleyn's, to name but a few.

Challenges in the sector

While there was no shortage of activity and notable deals last year, trade buyers and investors have become increasingly selective with their acquisitions. The introduction of 20% VAT on private school fees in January 2025, combined with the removal of business rates relief, increased National Insurance contributions, and ongoing Teachers’ Pension Scheme pressures, has created widespread disruption.

Independent school enrolment fell by 11,000 pupils in January 2025, a 1.9% year-on-year drop, which is triple the Government’s initial estimate of circa 3,000 pupils transferring to the state sector. Regional disparities are evident, with the North and Midlands hardest hit, and while state schools report localised pressure for places, the system has largely absorbed the shift.

During 2025, we recorded 38 independent school closures – a loss of 7,490 places, with closures disproportionately affecting preparatory schools.

Focusing on the future

Many feel that the intake in September 2025 marked a real low point, signalling a move beyond peak uncertainty. Therefore, the focus for many surviving schools going forward is on pupil numbers and financial performance. With some operators prioritising growth strategies to support this, and parents also welcoming the convenience of single-site education, we expect to see an increase in consolidation, which is reshaping operations as schools merge their primary sites with main campuses, releasing funds through asset sales and achieving operational savings.

Demand for services

During 2025, demand from buyers for SEND schools continued to outstrip supply, as the UK saw a further 10.8% increase in the number of children with ECHPs in January 2025, taking the total to circa 638,000.

As the number of ECHPs increases, so do the associated costs of tailored educational support.  Against a backdrop of government funding facing increased pressures, SEND featured more in the national press and within community conversations than ever before, as a rising number of parents experience the difficulties of ensuring their child’s needs are appropriately met.

Transactional activity

In 2025, there was no slowdown in new organic school developments; Melrose Education opened Kingfisher School in Dorset in January, Spaghetti Bridge opened Hampton Bridge School in Northampton in the spring, and Compass Schools opened Redwood Park School in Milton Keynes in September, to name but a few.

We saw incredibly strong buyer demand last year for operational SEND and SEHM schools and leasehold properties that are capable of creating new provision to meet the increasing demand for their services. We don’t anticipate any slowdown of this appetite in the short to medium term.

What’s next for the sector?

Looking ahead to 2026, the Schools White Paper, originally scheduled for autumn 2025, has been significantly delayed and is now expected to be published in early 2026. This will set out major SEND reforms with the primary aim of tackling challenges such as the mounting financial pressures on local authorities and improving support for children. The proposals are expected to introduce a new framework for supporting pupils with SEN, which may potentially replace EHCPs and place a stronger emphasis on inclusive practices within mainstream schools.

Linked to SEND reform, The Children’s Wellbeing and Schools Bill, presently at House of Lords Committee stage, introduces a newly intended profit cap which would grant the Secretary of State authority to limit the profits of “relevant providers” in children’s social care - including private SEND schools and care services - through statutory regulation. This measure is designed to prevent excessive profiteering, particularly in sectors where private equity–backed firms have dominant market shares of service places for vulnerable children.