Treetops up to no 10 in UK chains after deals

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Treetops Nurseries is now the tenth biggest nursery group in the country, after deals with two small chains added 500 more childcare places and seven more nurseries to the business.

The acquisition of the Surrey-based Bright New Minds group and My Day Nurseries increases Treetops' provision to 29 settings in England and 2,100 childcare places.

The group, which is based in Derby, has bought the Epsom, Cheam, Sutton and Teddington Bright New Minds nurseries. Two other sites had previously closed down, and the company had gone into administration.

At the same time, Treetops was negotiating the buyout of three freehold nurseries in Gloucestershire and Worcestershire.

Managing director David Hancock told Nursery World, 'It all happened in the space of a week. The purchase of My Day Nurseries was going through at the same time. They were a family-owned business looking for an exit.'

Treetops is planning further expansion through buying up individual nurseries or small chains, although Mr Hancock said it was 'becoming more competitive to buy groups', as other operators are also consolidating their businesses through acquisition.

Treetops has been backed by private equity firm Electra Partners since 2007 and both deals were financed without bank loans.

'We have aspirations to expand over the next 18 months. Our target is 40-50 nurseries,' Mr Hancock said.

'Right now it's all about geography. We have a lot of nurseries in central England and would like to expand more in Warwickshire and Northamptonshire. It's great that we now have a strong presence in and around London, another area we would like to grow.'

The group's expansion is in line with the predictions made by agent Christie & Co, whose business outlook for 2010 predicted that demand from buyers could exceed supply in the childcare sector as local and regional operators take advantage of lower property prices to expand.

Director Courtney Donaldson said, 'A number of these types of transaction were witnessed during the year, with further examples set to follow in 2010, as values remain relatively low.'

But she added that she expected transactions would be 'subdued compared to pre-credit crunch level and expect availability of good quality nurseries to remain low. For these, demand from buyers could exceed supply.'

She said, 'Those companies who can secure funding and have solid balance sheets are in the best position to take advantage of any opportunities that are sure to arise across what is still an attractive sector for investors.'

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