Two significant takeovers in the UK early years market

The recent significant news from the childcare sector was that Oakley Capital acquired ICP Education in a deal worth £176m, equivalent to around 13-times EBITDA. This was followed swiftly by the announcement that Dutch childcare provider Partou acquired Just Childcare.

The Oakley Capital acquisition of ICP Education was formed by the merger of ICP Nurseries and Cresswell Nurseries. ICP Education is one of the largest nursery operators in the UK, serving nearly 6,000 children at 44 nurseries across England, predominantly in London and the South East.

Peter Dubens, the managing partner of Oakley Capital, stated: “Our experience investing in high-quality businesses within the Education sector has led us to identify the nursery sector as an attractive area which is enjoying sustained growth.

Since 2015, Just Childcare – led by chief executive David Johnson, former Nord Anglia managing director – has established itself as one of the largest childcare providers in the UK. With the support of Phoenix Equity Partners, the group has grown from 7 settings in 2015 to 62 settings located across the North West, Yorkshire and South West. Just Childcare now provides over 4,700 early years places and employs around 1,300 staff. This acquisition marked a successful exit by Phoenix Equity Partners.

Josh O’Neill, the editor of EducationInvestor Global, recently disclosed that he had been informed that “a number of sale processes are firing up in the European childcare market – with several deals potentially worth hundreds of millions of euros looming on the horizon.”

This information paints a confident outlook for a robust sector. It aligns with the prediction given by our CEO Paul Miller in the January 2021 Redwoods Dowling Kerr Global Childcare Property Report that it “will be a record year for childcare transactions, with an increase in corporate acquisitions of childcare groups and high-value single setting nurseries.”

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