Alchemy backs £17.3m nursery care buyout

(PrivateEquityCentral.net) UK private equity turnaround specialist Alchemy Partners has backed the £17.3m ($28.5m) buyout by portfolio company Just Learning of CareShare, operator of the largest children’s nursery chain in Scotland, from UK private equity firm 3i.

The deal is the biggest to date in the £2.2bn nursery sector, and makes Just Learning the second biggest operator in the UK market.

3i held a controlling interest in Careshare since 2000, when founder Isabel Ridley negotiated a £12m management buyout. Ridley will remain on board as an adviser.

The acquisition incorporates Careshare's 20 Scottish nurseries in Edinburgh, Glasgow, Fife, East Kilbride, Dundee and Inverness, creating a combined group with 56 nurseries, 4,742 places and 1,200 staff across England, Scotland and Wales.

Alchemy Partners, under managing partner Jon Moulton, paid £13.8m for an 84.5 per cent equity stake in Just Learning in December 2001. Just Learning had sales of £7.8m prior to the buyout.

The children’s nursery market in the UK is five times bigger than it was at the beginning of the 1990s, and grew by 16.5 per cent last year, according to a report last month by specialist data company Laing & Buisson. The report said the market was still fragmented and a large number of companies were seeking to grow from a small base. The largest providers had only minor shares of the market, with the leader Asquith Court holding only a 1.4 per cent share.

In April, Alchemy backed the £7.35m management buyout of the investment banking division of UK broker Seymour Pierce.

Alchemy backed the E350m management buyout of listed Irish educational software company Riverdeep Group in December. In September, the firm acquired UK nursing home company Principal Healthcare Finance from Omega Worldwide in a £318m add-on acquisition to its Four Seasons Healthcare portfolio company.