The majority owner of Busy Bees, the largest private UK nursery operator with some 650 sites worldwide, is laying the foundations for an auction next year that will value the organisation at £2.5 billion, EducationInvestor Global can reveal.
This publication has learnt from three sources that Busy Bees’ majority shareholder, Ontario Teachers’ Pension Plan (OTPP), is working with elite boutique Rothschild & Co in preparation for a sale that will launch in Q2 2022.
The auction of one of the world’s largest nursery chains, which has a presence in nine countries across four continents, follows a spate of takeovers of smaller operators this year in Ireland, Italy and Australia.
It will be the first time that a controlling stake in Busy Bees has been brought to market in over seven years, since OTPP purchased the company for a reported £220 million in November 2013, when it operated 213 nurseries in the UK and none overseas.
Temasek acquired a minority stake in the organisation in December 2017 for an undisclosed price. It is unclear whether Temasek will also look to exit alongside OTPP.
Given the size of the deal, it is likely to attract large private equity houses, as well as infrastructure and pension funds, a source said.
French private equity group Ardian, which owns Study Group and AD Education, was an underbidder on France-based childcare operator Babilou, as reported, and could signal interest in Busy Bees, another source noted.
Filings with Companies House show that Eagle Superco Limited, Busy Bee’s holding company, booked revenue of £425 million and adjusted EBITDA of £134 million in the year ended 31 December 2020 – a margin of 31.5%. Both figures were down on 2019 (Revenue: £528 million; adjusted EBITDA: £139 million) due to the impact of the Covid-19 pandemic on the company’s global operations, the strategic report noted.
Last year, Busy Bees spent more than £36 million on acquisitions in the UK, US, Malaysia and Australia, according to filings.
Busy Bees was founded in Staffordshire, England, in 1983 when John Woodward, Marg Randles and their spouses sold their houses and bought a large property in Lichfield, converting the ground floor into a nursery after bemoaning a dearth of flexible, high-quality childcare.
In 2007, the founders exited to Australia’s ABC Learning Centres for £71 million but bought back a large chunk of equity when ABC, once the world’s largest private childcare provider, went bust the following year. The buy-back also saw Michael Milken, the so-called junk bond king who served nearly two years in prison for securities violations, become Busy Bees’ majority owner through his Knowledge Universe firm.
OTTP declined to comment. Temasek and Rothschild & Co had not responded to emailed requests for comment at the time of publication.
Date published: 7 October 2021