Nursery owner's £3.3m backing to launch new nursery group
Friday, October 28, 2016
Sarah Steel, the founder and owner of the Old Station Nursery group is launching a new nursery venture with investment firm Downing LLP.
The initial £3.3m funding will be used to launch nursery group Pilgrim Trading, with the first two sites planned to open in 2017.
The intention is that these nurseries will fund the group’s growth to ten settings in London and the South East over the next five years.
The management team includes directors with expertise in the care home sector.
The first 94-place nursery is due to open in spring 2017 on Twickenham High Street and is based on the ground floor of a new apartment building.
The second, also 94 places, will open in an old pump station in Brentford and will incorporate a new extension doubling the building’s size.
Ms Steel told Nursery World that it was ‘an exciting new project, a very different project, with different locations’ from the Old Station nursery group, which Ms Steel started in 2002.
The Old Station group of six nurseries in Oxfordshire and Gloucestershire will continue to operate separately as a family-owned business.
At one time the group founded by Ms Steel in 2002 grew to 16 nurseries, with several catering for military families and on RAF bases.
In 2014 Ms Steel sold four nurseries in Lincoln and Newark to the Children 1st group.
Downing has previously invested in Old Station and has also backed other nurseries and independent schools, including £3.3m in funding to allow Complete Childcare to acquire seven more sites in 2009 -it now owns 14 nurseries. The investors also backed prep schools with £2m for Alpha Schools to expand in 2011.
Tom Phillips, investment director, at Downing said, ‘We are always keen to work with and support ambitious management teams who are committed to growing their businesses, so we are very excited to work with Sarah Steel, director, and the Pilgrim team. Sarah is an industry veteran who has a clear vision for creating outstanding, purpose built nurseries, that will deliver first-class care and education for children.
‘This is a fantastic opportunity to build a successful nursery group by identifying vacant sites, carrying out significant renovation works, and converting them into high quality nurseries.
Ms Steel added, ‘We are delighted to have Downing support us in this venture; the focus on building long-term partnerships, combined with a deep understanding of the sector enabled the team to share our vision of creating a very successful nursery group. We are grateful for the invaluable support in meeting our tight completion timescales and look forward to growing the business together.’
Mr Phillips added, ‘As collaborative investors, we support passionate and operationally strong management teams in a sector that can be highly profitable.
‘The demographics and social trends in the catchment areas support increasing demand, profit margins can be attractive, and children’s education is a maturing industry. Our sector experience combined with our ability to carry out detailed financial and commercial due diligence means that we are very happy to invest into a company that, should benefit from high-quality earnings and strong asset backing as it matures.’
