Think Childcare receives takeover approach from Sydney based private equity firm

Think Childcare, the ASX listed early childhood education and care (ECEC) provider, has confirmed it has received a takeover proposal from the private equity arm of Australian investment manager Alceon Group Pty Ltd, Alceon Private Equity.

The offer of $1.35 per stapled security (share) represents an 8 per cent premium to its previous closing price of $1.25 on Friday 13 November and represents an enterprise value (EV) to earnings before interest tax depreciation and amortisation (EBITDA) multiple of around 5.2x FY2020 EBITDA guidance. 

Alceon Private Equity has indicated that it is willing to offer security holders all cash consideration in or a combination of cash and unlisted shares in a newly incorporated holding company.

Think has confirmed that Alceon has been extended a period of exclusivity up until 18 December 2020 for it to complete its due diligence. Think have agreed to cooperate and negotiate with Alceon in good faith. 

In relation to the next steps the Group highlights that “The Proposal is non-binding and therefore Securityholders do not need to take any action in relation to the Proposal at this time” and “The Group will keep the market informed in accordance with its continuous disclosure obligations as matters progress.”

As at June 30 2020 Think Childcare (TNK) owned and operated 74 childcare centres under the Nido Early School brand and Think Childcare Development (TND) had a portfolio of 25 centres in various stages of development. 

Alceon Group is an independent investment firm founded in 2010, with offices in Sydney, Melbourne, Perth and Brisbane. It has over $2.0 billion in capital under management. Alceon Private Equity invests in mid-market private equity and growth equity opportunities.

In a separate statement Think also confirmed the acquisition of four new purpose built Nido centres, two of which were delivered by its Development arm TND and 2 of which were delivered by a third party incubator. 

The centres are trading at an average utilisation greater than 90 per cent and cost $8.4m with an anticipated CY21 EBITDA of $2.1m.

After the purchase of these centres Think Development has a further 23 centres in its pipeline and Think Childcare owns and operates around 80 services.