Nido Education stock market listing process kicks off with $99m book build

Nido Education, the latest early childhood education and care (ECEC) venture created by Think Childcare founder Mathew Edwards, has commenced the process that will see it become an ASX listed company, the Australian Financial Review (AFR) has reported. 

The company is looking to raise $99.2 million through the sale of 99.2 million shares at $1.0 a share, with the offer due to open on 21 September 2023 . Should all go according to plan the shares will begin trading on the ASX on 16 October 2023. 

The implied market capitalisation of the business, should the IPO be successful, will be approximately $220 million, or around 8.0x forecast 2024 earnings before interest, tax, depreciation and amortisation (EBITDA) making it the second largest listed operator behind G8 Education. 

The proposed listing comes just twenty two months after Mr Edwards’ previous company Think Childcare was sold to Busy Bees Australia for around $195 million. 

Nido to own 52 centres on listing and pursue incubator model for growth 

Mr Edwards and his team currently own and operate a portfolio of twenty eight centres but will use a substantial portion of the issue proceeds to acquire a further twenty four centres taking the total portfolio size,post listing, to fifty two. 

Going forward the Group intends to continue to grow the network via the implementation of an incubator model that will see a third party developer construct and deliver a centre to an incubator who will then, post opening, secure Nido as the manager. 

Nido will receive a commencement fee and an annual management fee in exchange for the deployment of its ramp up expertise to build centre occupancy to a level which then triggers an option for NIdo to acquire the business from the incubator. 

It is understood that the incubation model will be the primary driver of Nido’s growth plans with as many as 32 centres slated to be in incubation by the end of 2024. 

Nido IPO news marks latest corporate development in ECEC space

Confirmation that Nido’s IPO process had commenced marked the end of a busy week of corporate ECEC news with both Mayfield Childcare and Embark Education Group both posting half year results and the long awaited sale of Affinity Education Group process starting. 

Affinity, owned by Quadrant Private Equity, began discussions with investment banks and advisors on a strategic review and the possible sale of the Group back in March 2023 but the deal was put on hold for a range of reasons including uncertainty around the outcomes of the ACCC price inquiry into the ECEC sector. 

According to the AFR the process to find a new owner for the company and its more than 200 child care centres is now underway. 

It is not clear yet what the status is on the sale of Guardian Childcare & Education. 

Partners Group – the Swiss based owner of Guardian – had allegedly appointed investment bank Morgan Stanley to sell the group in March 2023 but thus far no deal has been confirmed.