First European nursery chain takes slice of UK market

In a sign that foreign investors are keen to take advantage of the weakening pound, France’s second largest private nursery chain, Les Petits Chaperons Rouges (‘the little red riding hoods’), has completed the first European acquisition of a UK nursery chain.

Created in 2000 as the first provider of employer-sponsored childcare in France, LPCR has grown into one of the leading private nursery groups in Europe, taking 12,500 children per day at more than 300 nurseries across France and Germany.

Magic’s settings are located across Leicestershire, Northamptonshire, Cambridgeshire and Hertfordshire. All settings operate under individual brands, with 1,076 places in total, and Magic was ranked 23rd biggest in our Nursery Chains table 2016.

News that Magic was looking to sell drew interest from UK corporate operators, private equity houses, high net worth individuals, and several overseas entrants, including multiple parties based in China, according to property advisers Christie and Co.

Magic founder Tom Reed, who speaks fluent French, grew the chain via acquisitions of single sites and small regional groups since 2002, including the Laurels in 2014.  He said he and his shareholders selected LPCR after an eight-week process because of their shared cultural values and commitment to delivering ‘exceptional services’. He will be staying with the company.

The French group’s CEO Jean-Emmanuel Rodocanachi, hinted that this could be just the beginning, Brexit notwithstanding. He said, ‘We are now in the three most populated countries in Europe; France, Germany and the UK, and we want to focus our efforts on these three big markets over smaller countries’.

The company has 3,500 employees and made 160m euros in sales, and opened 46 settings last year.

Courteney Donaldson, Head of Childcare and Education said she had provided asset valuation to the company to help it with its expansion plans for over a decade. She said, ‘Having completed numerous high profile transactions during Q2 and Q3 2016, Tom Reed approached Christie & Co seeking confidential advice on the company’s exit strategy.’

According to a French newspaper Les Echos, the British market has a third more nursery places than in France, despite the populations of both countries being 65m.

For a report on current trends in the UK property market for nurseries, including more on overseas investors, see next week’s edition of Nursery World.