Nido confirms first acquisitions with four centres purchased from incubator pipeline

Jason Roberts

Oct 01, 2024

Save

ASX listed early learning provider Nido Education has confirmed the acquisition of four new early childhood education and care (ECEC) centres from its greenfield incubation pipeline for a cost of $11.85 million.

The announcement marks the first acquisitions since Nido listed on the ASX and is consistent with comments made in its half year results that four centres were on track to reach acquisition hurdles of 80 per cent ahead of forecasts and transition into the Group.

Nido will pay $11.85 million for the four businesses which are expected to earn earnings before interest and tax of $2.6 million next year, reflecting a forward acquisition multiple of around 4.5x.

Notably, Nido has also confirmed that the acquisitions have been somewhat de-risked through an earnout and claw-back of up to 10% of the acquisition investment based on the earnings for the first 12- months of Nido's ownership.

From a ramp up perspective the new centres achieved hurdle occupancy relatively quickly with the oldest having been open 15 months and the newest just 11 months and from a network perspective, two of which are located in Victoria and two in Western Australia, will take the overall Group size to 56 centres nationally.

Nido sourced the acquisitions from three different vendors, one of which is the Group’s primary incubator NAED.

Looking ahead it is understood that no additional centres will be acquired in 2024 however, expectations are that a portion of the remaining nine across Nido’s incubator pipeline will be acquired by the Group next year.

Don’t miss a thing

NSW Early Learning Commission conducts 220 unannounced visits

More than 100 regulatory officers conducted unannounced inspections at over 220 early learning services in a single-day compliance operation, as the NSW Early Learning Commission intensifies oversight across the sector.

Failing the Most Vulnerable: Two WA Childcare Providers Penalised Over Supervision Breaches

In February the Western Australian State Administrative Tribunal handled two separate disciplinary proceedings brought by the CEO of the Department of Communities against out-of-school-hours care (OSHC) providers. Both cases highlight critical failures in active supervision, particularly concerning highly vulnerable children diagnosed with autism who managed to wander away from their respective services unnoticed.

Keeping children safe with one simple lesson

Water safety remains at the forefront of national concern, as drowning continues to be the leading cause of accidental death for children aged 0-4.

Prime childcare and medical investment opportunity hits the market in Thornhill Park

A permit-approved early learning and medical asset in Melbourne’s west is set to test investor appetite for secure income, long-term leases and value-add potential in a high-growth corridor.

Workforce planning in ECEC: from compliance requirement to strategic advantage