The flurry of deal activity in the first half of last month was in advance of the anticipated reduction in Entrepreneurs’ Relief, which indeed materialised with the Budget announcement in March. As such, we had already expected that March would be a busier month for deals than average.
What most of us had not anticipated was the major fallout from the coronavirus pandemic. The environment in which we are operating has moved at an unprecedented pace, from reduced staffing and enrolment to closure of all nurseries expect for children of key workers and vulnerable children.
Essentially, most deals in train have had to be put on hold or have their completion dates extended. Most operators who were in sales processes are focusing on just keeping their businesses afloat (there has been so much uncertainty in attendance, fees, funding, staffing and the rules around furloughing), operators who were acquiring are now focused on cash conservation, and investors are unable to undertake their due diligence.
What do we expect once the dust has settled? The sector remains very investible and we expect longer term for deal activity to recover. As part of that, we do expect that there will be more ‘fire’ sales or investments as the situation unfortunately finally pushes some operators over the edge and some otherwise solid businesses become in need of urgent financial ‘bailouts’.
ROUNDUP OF THE LATEST DEALS
by Katy Morton
Old Station snaps up Essex setting
The Old Station Nursery group has bought Small Friends Day Nursery in Leigh-on-Sea, Essex, bringing its total number of settings to 19. The nursery, which has been rated Ofsted Outstanding since 2015, provides care for 40 children from birth.
The Old Station Nursery was bought by French group La Maison Bleue in February 2019. The group is a leading operator in France, Switzerland and Luxembourg, with more than 300 nurseries, and is now building a significant presence in the UK.
In December 2019, The Old Station Nursery bought the six-strong Sandhills group.
Small Friends’ previous owner, Louise Parfett, said, ‘I have loved creating and nurturing Small Friends into a thriving childcare provision.’
Sarah Steel, managing director of The Old Station Nursery, commented, ‘We are really excited about Small Friends joining our family.’
The sale was handed by Christie & Co.
Storal Learning buys Wilts nursery
Storal Learning has bought its 19th setting.
The nursery group has acquired Barney Lodge Day Nursery in Warminster, Wiltshire through Christie & Co, and the fast-expanding operator now has nurseries in the East Midlands, North West, South East and South West.
Varun Chanrai, managing director of Storal Learning said, ‘Barney Lodge is a fantastic nursery with a wonderful team, providing outstanding childcare.’
Poppy and Jack’s bags Notts provider
Poppy and Jack’s Nursery Group has bought West Bridgford Nursery in Nottingham.
This is the group’s tenth setting.
The 40-place nursery was opened in 2012 by Alison Putnar, who decided to sell the business to improve her work/life balance.
The deal with West Bridgford was struck by Christie & Co, and the setting was sold to Poppy and Jack’s on a freehold basis, with an asking price of £850,000.
Clarence group expands in Cambs
Nursery group Clarence House Day Nurseries has acquired Tots to Teens Nursery in Cambridgeshire.
The group of eight settings, located in Leicestershire, Cambridgeshire and Northamtonshire, is owned by Mark Wilsher.
Tots to Teens Nursery was established in 2012 by Gill O’Neil, who originally planned to create a nursery group.
Mr Wilsher said, ‘This was not an easy transaction. We found Redwoods Dowling Kerr’s lead negotiator Natasha Satterthwaite persistent and determined to ensure that everything possible was done to make the transaction happen.’
Flint site re-opens
A nursery that shut its doors in 2018 has been bought by a new owner and re-opened.
Formerly Daisy Chains Nursery, the setting, based in Flint, has been re-named Little Teds Nursery and Academy by new owner, businessman Roy Damrell.
The sale of the 40-place setting was brokered by Abacus Day Nursery Sales.
Little Teds will undergo refurbishment, to include a dedicated dance and movement space, following which it could apply to increase registration to 85 children.
Mr Damrell’s plan is to open a chain of nurseries, supported by the backing of investors.
Two settings get new owners
A group of two settings in Nottinghamshire has been acquired by existing nursery owners Heena and Girish Purohit.
Rated Outstanding by Ofsted, the two settings, which operate under the name of Smarties Day Nursery, offer a combined 69 childcare places.
Former owners husband and wife Steve and Christine Doubtfire made the decision
to sell the settings so they
The existing management team will remain in place.