The Cornwall-based chain, which currently owns 18 nurseries offering 1,318 places across the south west of England, obtained the funding from Santander Corporate and Commercial supported by BDO LLP and Foot Anstey legal advisers.
The money received includes a specialist growth capital loan, which Santander offers to UK businesses with annual turnovers of up to £50m that have a demonstrated history of high year-on-year growth in turnover, profit or employment.
The owners of Happy Days now plan to open three new, purpose-built nurseries, each with around 80 places, in 2018, with seven more to follow by 2020.
Founded by Robin and Sarah Karkeek in 1993, Happy Days has expanded to become the 19th largest nursery chain in the UK following a management buyout in 2012 backed by private equity firm Livingbridge.
The investment from Livingbridge allowed Happy Days to open five new sites in the last three years in Exeter, Bristol and Poole, and relocate its Derriford NHS nursery in Plymouth.
Happy Days is ranked fourth in the Nursery Chains Ofsted grades league table published this week, with 11 outstanding settings, five good and two yet to be inspected.
Jackie Arthur, managing director of Happy Days Nurseries, said, ‘This is a really exciting investment from Santander. They have worked with the business and management team in providing an appropriate funding solution for our development plans, and their experience together with the professional relationship the team has developed with Happy Days over the last few years meant that we were very keen to work together.
‘We believe that with this investment, and support from Santander, we are well placed to achieve our growth ambitions.’
Peter Abel, Santander’s growth capital director, commented, ‘As an established care provider, with excellent governance and performance record, now is the appropriate time for our growth capital product to support the business with its further roll-out plans into new geographic areas.
‘This is a quality business with a very experienced management team and we expect it to continue its growth over the coming years.’