Evolve Education, a New Zealand-headquartered pre-school operator, has cancelled its acquisition of five nurseries in Australia in light of Covid-19, in a new example of how the pandemic is scuppering deals.
Evolve agreed last December to purchase five centres in a A$12 million (£6.9 million) deal that was expected to close on or around 31 March, 2020. The transaction would have added 461 places to Evolve’s Australian portfolio, which comprises 10 sites with 966 places.
But “due to several factors including the impact of Covid-19, none of these acquisitions were able to be completed by the sunset date of 8 April 2020 and will now not proceed,” New Zealand- and Australia-listed Evolve said in a press release. The firm “will, however, continue to evaluate Australian childcare centre acquisition opportunities as they arise”.
The cancellation of the purchase will be seen as a fresh example of how trade buyers and other investors are struggling to understand the financial and operational impacts of the Covid-19 pandemic, which has forced nurseries, schools, universities and other education centres to close.
In Australia, the federal government has kept schools and nurseries open – but some states, including Queensland and Victoria, have said that distance learning will replace classroom provision during the second term, which began this week.
UNESCO estimates that 90% of the world’s learners – more than 1.5 billion people – are currently confined to their homes.
Government-enforced closures have hit nurseries particularly hard because fee-paying parents argue that, unlike schools and universities, which can continue to teach online amid lockdowns, childcare can only be delivered in person and they should thus be entitled to rebates.
Across dozens of countries, nursery operators – which still have rent, insurance and staff salaries to pay – are trying to get a handle on their hammered finances as the pandemic rages on.
In the UK, for instance, many nursery providers have temporarily laid off the majority of their staff in order to access state funding to help see them through the coronavirus crisis.
Date published: 14 April 2020