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SYDNEY - ABC Learning Centres has made a series of acquisitions in New Zealand, the US and Britain that will make it the world's largest publicly traded childcare service provider, and the second biggest private childcare provider in the United States.
It has snapped up US-based childcare services provider La Petite Academy for about US$330 million ($475 million).
The company has also announced two other agreements, including the purchase of UK-based Busy Bees Group Ltd for £71 million ($205 million), and the A$65 million ($74 million) acquisition from Macquarie Leisure Services of 49 childcare centres in New Zealand, and six in Australia.
"The total cost of the all-cash acquisition is approximately $A680 million," ABC said.
It planned to finance the deals through a new debt facility provided by Westpac, the Commonwealth Bank of Australia, Bank of America and Goldman Sachs.
As a result of the acquisitions, ABC has bumped up its earnings forecast for 2006/07.
"Management has increased its ebitda [earnings before interest, tax, depreciation and amortisation] forecast for the period to June 2007 from in excess of $A250 million to in excess of $A273 million," the company said. "ABC expects the acquisitions to be EPS [earnings per share] accretive for the same period."
ABC Learning chairman Sallyanne Atkinson said the acquisitions reflected the group's strategy to take advantage of opportunities in the large but fragmented US market, while consolidating its share of the market in Australia and New Zealand.
The company's global chief executive, Eddy Groves, said the acquisition of La Petite moved ABC Learning closer to its goal to become the industry leader in early childhood education in the US, a market it first entered 11 months ago.
With the La Petite centres, ABC will more than double its footprint in the US market, where it bought Learning Care Group in January and Children's Courtyard in August.
Groves said none of the companies operating in the US had more than a 2 per cent slice of the market, and ABC would have about 1 per cent, with 1038 centres.
The acquisition of Busy Bees, the fifth biggest UK operator, is expected to be completed by December 18, and to make an ebitda contribution of £9.5 million in 2008.
It will give ABC 33 owned and 15 managed centres in the market.
The Macquarie Leisure deal is due to settle late in the first quarter of 2007 and is expected to contribute A$11.7 million in ebitda terms in fiscal 2008.
ABC Learning will have 1158 centres, and about 20 per cent of the long-day childcare market in Australia, by June 30, 2007, and 77 centres in New Zealand.
ABC Learning shares were up A36c or 4.59 per cent to $A8.21 after trading as high as $A8.48.
- AAP
