A Lancaster-based private equity firm is taking a third shot at the youth-enrichment market, a space where it has found success in the past.
- PennSpring Capital has acquired Emagination Tech Camps, which has been rebranded as Emagination STEM Camps, according to Lou Castelli, PennSpring’s managing partner.
- The previous owner was a private investor who bought the company during the Covid-19 pandemic, when its camps were shut down, Castelli said. He declined to name the investor or the terms of the deal.
- “It was a very sizable business prior to Covid,” said Castelli, noting that PennSpring plans to grow the company by adding new camps and by franchising.
What’s the appeal: Founded in 2017, PennSpring principals have long been familiar with what is called the youth-enrichment market, a $20 billion-plus industry that covers activities that children engage in outside of regular school.
- PennSpring principals invested in 2000 in First Serve Tennis Academy, which was sold to a Washington, D.C.-area private-equity firm called Gladstone, Castelli said.
- They then invested in Skyhawks Sports Academy, which was sold in 2018 to Stacks Sports, a firm whose backers include Dallas Cowboys owner Jerry Jones, Castelli said.
- Skyhawks is a national provider of youth sports camps.
- “We know the youth-enrichment space better than any other industry,” he said.
What’s Emagination: Founded in 1982, the company had been offering overnight summer camps at more than 40 college campuses, Castelli said.
- Emagination reopened last summer on six campuses, including Rosemont College outside Philadelphia. The others are in Connecticut, Georgia, Illinois, Massachusetts and Virginia.
- The company, which has an office in New Hampshire, has a full-time staff of 13 people, Castelli said.
- Annual revenue is still in the seven figures despite the company’ smaller scope, Castelli said.
- The previous owner had purchased Emagination from founder Marilyn Pardus, Castelli said.
- Considered a pioneer in computer education, Pardus died in 2022, according to her obituary in the Boston Globe.
What’s next: PennSpring plans to expand the overnight camps but also adopt a franchise model.
- Franchisees would likely offer in-school and after-school programs rather than summer camps, Castelli said.
- He did not expect economic conditions to affect Emagination.
- “We actually think spending on your own kids is a little bit recession-proof,” he said. “Not completely, but I think parents, we found, are going to take one less vacation, or not go on vacation, so they can still support their kids’ experience and endeavors.”
- Emagination’s chief competitor in the science and technology space is a California-based camp operator called iD Tech.
- However, it also competes with other options children have outside of school, whether that is sports, music or computer coding.
- Other local companies active in youth enrichment include Middletown-based Soccer Shots, which is backed by a Philadelphia-area private equity firm, Susquehanna Private Capital.