The backers of one of the UK’s largest childcare operators have appointed advisors to explore strategic options that could include a £200 million auction of the business, EducationInvestor Global can reveal.
This publication has learnt that the shareholders of Kids Planet, headquartered in Cheshire with 59 nurseries across England, have hired EY to carry out a strategic review that could result in a sale of the group.
Kids Planet, which is backed by Business Growth Fund (BGF), acquired rival Northwest England-based operator Kids Allowed in January 2020.
In Kids Planet, investment houses and trade consolidators will see an opportunity to acquire a slice of – or enter – the UK’s highly fragmented early years sector, in which the top-10 players own less than 15% of the market.
In the year ended 31 March 2020, Kids Planet logged earnings before interest, tax, depreciation and amortisation (EBITDA) of £7.2 million against turnover of £33.3 million.
Two sources told EducationInvestor Global, on the condition of anonymity, that Kids Planet could be marketed off run-rate EBITDA of £15 million, which would factor in forecasts predicated on recent performance and growth.
A source familiar with the business and pricing in the early years sector told this publication that an enterprise value in excess of £200 million – equal to at least 14-times Kids Planet’s EBITDA – could be attributed to the company.
BGF, a £2.5 billion investment group established by a consortium of British banks, has since 2016 invested £23 million in Kids Planet, according to its website.
According to filings with Companies House, 25-50% of Kids Planet is owned by chief executive Clare Roberts, who founded the business in 2008 alongside her father John, chairman.
Clare Roberts offered “no comment” when contacted by EducationInvestor Global.
EY and BGF had not responded to requests for comment at the time of publication.
In March, Kids Planet, which caters to more than 8,000 children, was ranked number one by measure of ‘quality’ out of 25 nursery chains scored by regulator Ofsted.
A month prior, in February, Kids Planet won a mandate from the University of Oxford to operate its five existing nurseries – marking the company’s first steps into the South of the UK.
Kids Planet also runs a training academy, through which professionals can undertake apprenticeships and master’s degrees in the field of childcare.
Date published: 23 April 2021