Secrets Revealed: How To Get The Best Offer For Your Child Care Centre

If you’re thinking of selling your child care centre, you’re probably thinking that you’d love to know who to consult to make sure you get the best offer. You’re probably reading about the past experiences of others, asking how others got great offers for their Child Care Centre.

In this blog we’d like to guide you through top 3 ways to successfully get the best offer for your child care centre, and give you better clarity on the best time to sell. Plus, we’ll spill our secret on how to get the BEST offer! Here are our three most effective ways to sell your child care centre.

What is the key to get the best offer?

I often use this analogy to explain, “Let’s say you have a car. When the car is working just fine (engine, parts, and seat covers are okay), you can easily get a good deal. But when the engine starts to fail… you’re lucky if you find someone willing to pay half the price.”

Child care centres are no different. The better the business is running, the better the offer you’ll receive.

So how do you sell your child care centre?

You could sell openly, which may include advertising fees, however you may be running the risk of conditions around finance which can result to the termination of the sale… This is a key concern of many centre owners.

When is the best time to sell to get the TOP value?

The question is when owners should look at selling… too often owners think that when the business is running well, it is best to hold on. While this is true from a cash flow perspective, it does limit your child care centre from securing top dollar.

Historical figures can become irrelevant as soon as the current performance faces any of the following issues: low occupancy, after the transition of kids from year to year; a market review, having increased the rent well above the typical rise; or wages not being maintained at a 55% ratio to revenue.

Find Out What Your Centre is Worth, Get Your Free Assessment

So how do you REALLY get the best offer?

Let’s go back to my response above. The car in great condition gets the best offer, of course! Why? Because the buyer need not to spend more to have it fixed.

It all makes sense, doesn’t it? The best way to get the best offer, is to sell it while it’s not facing any problems yet… and of course, selling it to the right people. Look for companies which have readily available capital, this lowers the risk significantly for a successful sale. Those who have established themselves to be the best by providing quality transactions with their customers.

So when you’re considering selling your child care centre, please look at how your business is performing, ask yourself if it is the right time to sell it, and meet those who have capital readily available.

If you’re interested in getting the best value offer for your child care centre, send us a message or leave a comment below.


You can apply for a free appraisal here to find out what your centre is worth 


11th August 2014 - G8 Education acquires 25 centres for $73m

Listed Queensland-based childcare and education centre operator G8 Education Limited (ASX: GEM) is pleased to announce that it has contracts in place that give it the right to acquire 25 premium childcare and education centres from a number of different vendors. 
G8 Education Limited has contractual arrangements with each of the vendors, conditional upon customary licensing and landlord approvals. The acquisitions will be funded from cash reserves. Subject to these conditions being satisfied the acquisitions are expected to settle before the end of January 2015. 
The total purchase price for the 25 centres is $72.7 million payable at settlement and a further $10 million conditional upon the centre based EBIT target being achieved in the 12 months post settlement. The purchase price is 4 times anticipated EBIT for the 12 months post settlement. 
G8 Education Limited Managing Director, Chris Scott, said: ‘These transactions will increase the total number of places in the Australian portfolio to 31,924 per day and will be EPS accretive from settlement date.’ 

8th July 2014 - G8 Education Limited to acquire 19 premium childcare centres

Listed Queensland-based childcare and education centre operator G8 Education Limited (ASX: GEM) is pleased to announce that it has contracts in place that give it the right to acquire 19 premium childcare and education centres from a number of different vendors.
G8 Education Limited has contractual arrangements with each of the vendors, conditional upon customary licensing and landlord approvals. The acquisitions will be funded from existing cash reserves.
Subject to these conditions being satisfied the acquisitions are expected to settle before the end of October 2014.
The total purchase price for the 19 centres is $25.7 million with $24.3m payable at settlement and a further payment of $1.4 million conditional upon the centre based EBIT target being achieved in the 12 month post settlement. The purchase price is 3.9 times anticipated EBIT for the 12 months post settlement.
G8 Education Limited Managing Director, Chris Scott, said: 'The acquisition of these premium centres at 3.9 times anticipated EBIT for the 12 months post settlement is another key milestone in the group's acquisition strategy.
The centres are expected to contribute to EBIT immediately upon settlement.
 "This transaction will increase the number of places by 1,213 and takes the total number of places in the Australian portfolio to 29,703 per day".

3rd July 2014 - Settlement Update

Listed Queensland based childcare and education center operator G8 Education Limited (ASX:GEM) is pleased to provide this settlement update in relation acquisition of childcare and education centres announced to the market during 2014.
As set out in the ASX release of 3 April 2014, the G8 Education group of companies has conditional contractual arrangements that will enable it to acquire up to 154 childcare and education centres with a combined total of 10,457 places by 30 September 2014.
During June 2014, G8 Education has settled 11 childcare and education centres, adding 879 places in Australia.
The acquisitions have been funded from existing cash reserves.
The G8 Education group now has 349 childcare and education centres in Australia, with a daily licence capacity of 24,821 children.

29th April 2014 - G8 Education Limited to acquire 7 premium childcare and education centres

Listed Queensland-based childcare and education centre operator G8 Education limited (ASX: GEM) is pleased to announce that it has contracts in place that give it the right to acquire 7 premium childcare and education centres from a number of different vendors.
GS Education Limited has contractual arrangements with each of the vendors, conditional upon customary licensing and landlord approvals. The acquisitions will be funded from existing cash and bank facilities. Subject to these conditions being satisfied the acquisitions are expected to settle before the end of August 2014.
The total purchase price for the 7 centres is $16.3 million payable at settlement. The purchase price is based on 4 times anticipated EBIT for the 12 months post settlement.
G8 Education limited Managing Director, Chris Scott, said: '7he acquisition of these premium centres at 4 times anticipated EBIT for the 12 months post settlement is a clear indicator of the depth, breadth and fragmentation of the Australian Childcare sector.
The centres are expected to contribute to EBIT immediately upon settlement.
This transaction will increase the number of places by 495 and continues G8's expansion in a way that is earnings per share accretive.

23rd March 2014 - G8 Education to acquire Sterling Early Education and 91 Centres

Overview
Listed childcare and education centre operator G8 Education limited (ASX: GEM) is pleased to announce that it has entered into a number of contracts which result in G8 Education having the right to acquire all of the issued capital in Sterling Early Education Limited and 91 premium childcare and education centres from a number of different vendors. These 91 premium childcare and education centres include 76 long day centres and 15 centres for outside school hours care. The acquisition of these centres will increase G8 Education's Australian licensed places by 6,203 places to 27,995 places.


Settlement of the acquisitions will occur progressively between 31 March 2014 and 30 September 2014, subject to contractual conditions being satisfied.
The aggregate purchase price of $228 million is payable on a range of completion dates between 31 March 2014 and 30 September 2014. The 91 centres will contribute $39.4 million of annualised centre based EBIT for financial year 2015. The aggregate purchase price of $228 million represents 5.79 times anticipated centre based EBIT for the full12 months of the financial year ending 31 December 2015.


Purchase Price
The aggregate purchase price of $228 million is payable as follows:
• Cash of $215 million, payable at the time of settlement of each contract with $10.5 million subject to centre based earnings targets being met. Payment will be made progressively from 31 March 2014 to 30 September 2014 as conditions are satisfied and contracts settled; and 

• Issue of approximately 3 million G8 Education shares on 31 March 2014. The amount of cash and number of G8 Education shares is subject to adjustment at settlement. However
the aggregate purchase price will be $228 million.

Funding 
GB Education Limited will fund the cash component of each of the acquisitions through a combination of cash reserves and debt arrangements.

Strategic Corporate Acquisition
The acquisition of Sterling Early Education and 91 premium childcare and education centres is a significant corporate transaction for G8 Education that will increase the total number of Australian licensed places operated by it by 28.5%. The acquisition will be earnings per share accretive.

10th February 2014 - G8 Education to acquire $105m worth of childcare centres

G8 Education Limited (ASX:GEM) has inked contracts to buy 63 Australian childcare and education centres for about $105 million from various vendors. 

Following the acquisitions the provider of developmental and educational child care services will be operating 296 Australian centres.

Managing Director Chris Scott has described the purchase as a significant milestone for the company. The centres are expected to contribute to earnings before interest and tax immediately upon settlement.

G8 Education plans to fund the purchase from existing cash reserves and debt and hopes to settle the transaction by the end of April 2014. 

G8 Education reported a net profit of $11 million in the first half of the 2013 financial year.   These acquisitions were brokered by Collins Acquisitions.

23rd December 2013 - G8 Education acquires Early Education Centres

The directors of G8 Education Limited (ASX: GEM) are pleased to announce that settlement has now been effected for all Early Education Centres announced to the ASX dated 11 June 2013, 26 August 2013 and 27 September 2013.

The acquisitions were funded from existing cash reserves.

The group now has 233 Early Education Centres with a daily licence capacity of 17,538 children.

2nd December 2013 - G8 Education settles 23 centres

The directors of G8 Education Limited (ASX: GEM) are pleased to announce settlement of Aladdin, Iddy Biddy, Nurture One and Just Us Kids Early Education Centres. The acquisitions were originally announced to the ASX on 27 September 2013. There are no more acquisitions to settle from the ASX announcement dated 27 September 2013.

The purchase price for the 23 centres was $27.2 million upfront at settlement including transaction costs. The acquisition was acquired on 4 times EBIT.

The acquisition was funded from existing cash reserves.

11th November 2013 - G8 Education settles 3 childcare centres

The directors of G8 Education Limited (ASX: GEM) are pleased to announce settlement of Cozi Kids, Kids Start and Bumble Bee Schoolhouse. The acquisition was originally announced to the ASX on 26 August 2013 and 27 September 2013.

The purchase price for the three centres was $2.1 million including transaction costs. The acquisition was acquired on 4 times anticipated EBIT for the 12 months post settlement.

The acquisition was funded from existing cash reserves.

G8 Education Limited to acquire 29 premium childcare and education centres

Listed Queensland-based childcare and education centre operator G8 Education Limited (ASX: GEM) is pleased to announce that it has contracts in place to acquire 29 premium childcare and education centres. The childcare centres are located across New South Wales, Tasmania and Victoria.

G8 Education Limited has contractual arrangements with various vendors, conditional upon customary licensing and landlord approvals.  The acquisitions will be funded from existing cash reserves.  Subject to these conditions being satisfied the acquisitions are expected to settle before the end of December 2013.

The total purchase price for the 29 centres is $42.6 million with $39.8 million payable at settlement and a further payment of $2.8 million is conditional upon the centre based EBIT target being achieved in the 12 months post settlement.  The purchase price is based on 4 times anticipated EBIT for the 12 months post settlement.

G8 Education Limited Managing Director, Chris Scott, said: “The acquisition of these premium centres is significant to G8 Education’s expansion in New South Wales and Victoria and opens the Tasmanian market for future opportunities.   

Together these centres will contribute $10.65 million of annualised, centre based EBIT. The centres are expected to contribute to EBIT immediately upon settlement.

This transaction will increase the number of places by 2,338 and continues G8’s expansion in a way that is earnings per share accretive.”

G8 Education looks to raise $60m

LISTED childcare and education centre operator G8 Education is raising $60.14 million as it looks to expand further after buying 29 new childcare centres across NSW, Victoria and Tasmania.

The purchase will increase the number of places the company controls by 2,338 and will cement G8 Education's expansion as it capitalises on its status as the only listed childcare centre operator.

The company will pay a total of $42.6m for the centres if they hit earnings targets in the 12 months after the deal settles. The price is based on four times anticipated earnings before interest and tax.

G8 Education managing director Chris Scott, said: "The acquisition of these premium centres is significant to G8 Education's expansion in New South Wales and Victoria and opens the Tasmanian market for future opportunities."

The acquisitions were funded by a $70m senior unsecured note offering made in August. The company's latest $60m placement at $3.10 per share to domestic and international institutions will help it expand further.

The equity offer is being jointly managed by Petra Capital and Canaccord Genuity.

The company, a long day childcare centre operator, operates and manages childcare centres in Australia, as well as running Singaporean-owned and franchised childcare centres.

GEM already had 194 owned childcare centres in Australia as well as 18 owned-and-operated childcare centres and 51 franchised child care centres in Singapore.

The latest deal took GEM's total number of local childcare centres to 210.

GEM's brands include Early Learning Services, World of Learning, Community Kids, Kindy Patch, Headstart, Kinder Haven, Penguin Childcare, Pelican Childcare, Casa Bambini & Little Einsteins.

- See more at: http://www.theaustralian.com.au/business/property/g8-education-looks-to-raise-60m-to-fuel-further-growth/story-fn9656lz-1226728437570#sthash.FTOssVv8.dpuf

Settlement of Roly Poly Childcare and Education Centres

Collins Acquisitions and the directors of G8 Education Limited (ASX: GEM) are pleased to announce the settlement of Roly Poly Childcare and Education Centres. The eight centres are located in NSW . The transaction was originally announced to the ASX on 11 June 2013.

The purchase price for the eight centres was $10.8 million including transaction costs which represents 4 times anticipated EBIT for the 12 months post settlement.

The acquisition was funded from existing cash reserves.

 

Collins Acquisitions brokers the sale of Mary Poppins, Peppercorn & Smart Care Childcare and Education Centres

The directors of G8 Education Limited announced the settlement of Mary Poppins, Peppercorn & Smart Care Childcare and Education Centres. The three centres are located in Victoria . The transaction was originally announced to the ASX on 11 June 2013.

The purchase price for the three centres was $5.3 million including transaction costs which represents 4 times anticipated EBIT for the 12 months post settlement. $4.9 million was paid at settlement and a further payment of $0.4 million is conditional upon the centre based EBIT target being achieved in the 12 months post settlement.

The acquisition was funded from existing cash reserves.

 

$24m in new acquisitions

Collins Acquisitions has assisted in Childcare centre operator G8 Education Limited (ASX:GEM) acquiring 17 premium centres from vendors in Queensland, New South Wales and Victoria at a total value of $24 million.  G8 says it has contractual arrangements in place with vendors, with acquisitions pending only on customary licensing approvals.  The planned acquisitions will be funded through existing cash and bank facilities and are expected to settle before the end of August. Managing Director Chris Scott says the centres will contribute $6 million in annual pre tax earnings, and are expected to contribute immediately upon settlement. G8 has also announced a 20 per cent increase in its interim dividend, from 10 to 12 cents per share. G8 Education generated a net profit of $19.2 million in its 2012 financial year.