Another nursery chain sees venture capitalist takeover
Alison Mercer
Wednesday, December 19, 2001
One of the ten largest nursery chains in the UK has changed hands in a deal worth 22m. Just Learning was bought last week by private equity firm Alchemy. The new owner, which sought unsuccessfully to buy the car manufacturer Rover last year, says it is committed to expanding the chain of 21 nurseries to at least 40 over the next five years and will provide an initial 7.5m for new nurseries.
Just Learning was bought last week by private equity firm Alchemy. The new owner, which sought unsuccessfully to buy the car manufacturer Rover last year, says it is committed to expanding the chain of 21 nurseries to at least 40 over the next five years and will provide an initial 7.5m for new nurseries.
Alchemy has taken over foun-der Duncan Bannatyne's original controlling stake in the business, and five per cent of the shares in the company will be owned by the group's managerial staff.
Just Learning co-founder Michael Fallon, who remains managing director of the company, said, 'It's a great deal. We are now free to expand after Duncan's exit, and we plan to be one of the top three operators in four or five years' time.
'It is also very significant for our nursery managers. This is the first deal of its kind in the nursery sector to give senior managers a real stake in the business through our new share structure. They will share five per cent of the company and stand to gain as the company expands.
'Alchemy is known as one of the most dynamic investment houses. Its investment recognises the solid success of the business to date, and provides a real opportunity to take advantage of a growing market.' Rachel Murphy, a senior investment specialist at Alchemy, said, 'Alchemy is delighted to have acquired a majority stake in one of the UK's fastest-growing high-quality nursery groups. We are looking forward to working with Michael Fallon and his team in the further development of this excellent business.'
Just Learning owns the freehold to most of its nurseries, increasing their value. They have sold for an average of more than 1m each. Most of the nurseries are in the south of England and are registered for 100 children.
The most recent issue of the Nursery World supplement Nursery Chains (November 2001) reported that Just Learning was understood to be on the market and was expected to fetch between 10m and 20m. Nursery Chains also listed Just Learning, founded in 1995, as the eighth largest nursery group in the UK, with 1,948 places.
Most of the ten largest nursery groups are now effectively owned by venture capitalists, with Asquith Court, Leapfrog, Jigsaw, Busy Bees and Kidsunlimited all having secured funding to expand in this way.