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Mayfield completes $8.0m capital raising, paves way for Genius centres acquisition
Jason Roberts
Nov 02, 2021
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ASX listed Mayfield Childcare has confirmed that commitments have been secured from existing and new institutional investors to raise approximately $8.0 million that will be used as part of the consideration of the acquisition of a portfolio of Genius childcare centres.
The deal will see Mayfield acquire fourteen existing Genius centres for $39.2 million payable in two tranches with the initial sum amounting to $31.2 million payable and the balance, $8.0 million payable at the end of CY2022 should certain EBITDA hurdles be met.
Around 21.7 million Mayfield shares issued at $1.15 plus $6.24 million in cash will be transferred to Genius as the initial consideration on completion of the deal with funds raised via the placement used in the cash component.
The total deal value, assuming the earn out is achieved, will be 4.9x CY2022 EBITDA and will see Genius shareholders own around 40 per cent of the enlarged company.
From a valuation perspective, the initial payment represents a multiple of 3.9x CY2022 EBITDA and, assuming the earn out hurdle is achieved, the total consideration will be 4.9x CY2022 EBITDA.
“This is a great step forward for the Mayfield business that substantially changes the economics and financial standing of our business, as we move into the CY22 year.” Mayfield Childcare CEO Dean Clarke said.
“We are delighted at the ongoing support shown by our existing shareholders and the strong interest received from new investors.”
Deal sees Mayfield achieve national status and secure growth pipeline
The transaction will see Mayfield add fourteen centres to its current network of 22 centres and importantly broaden its reach outside of Victoria with the statement noting that “for some time Mayfield has sought to secure the right acquisition growth opportunities for the business” before adding that this deal represents a “significant step change in the business.”
The Genius deal will see it assume ownership of eight Queensland based centres, five Victorian centres and one centre in South Australia, which will take its overall network to thirty six centres and for the first time give it a multi regional footprint.
As well as securing immediate access to growth opportunities through the acquisition of the fourteen centres, both parties have also struck an incubator partnership through which Genius will identify, develop and trade up centres for sale to Mayfield.
The partnership term is expected to run for five years over which time Mayfield has the option to acquire centres that meet predetermined performance metrics such as 75 per cent occupancy for three consecutive months and annualised EBITDA of greater than $150,000.
The acquisition price for incubated centres will be 4.25x annualised EBITDA.
To learn more about Mayfield Childcare please click here, and to learn more about Genius Childcare please click here and to read the ASX statement click here.
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