Advanced Childcare Limited (“ACL”) today announced the acquisition of The Continuum Care and Education Group to create the largest provider of specialist children’s care and education services in the UK.

The combined Group establishes the first national-scale provider able to deliver a complete therapeutic care pathway to Local Authorities for looked-after-children. More than 80 of the total 152 Local Authorities are existing customers.

Joined with Continuum, ACL brings a market-leading breadth of therapeutic and special education services which enable highly traumatised looked-after-children to gain the skills and confidence to transition from specialist residential homes to family placements, such as fostering, or independent living.

Over 90,000 looked-after-children passed through the care system in the UK last year, the majority placed because of abuse or neglect. More than 10,000 new care applications were issued by the courts last year, a record and up 36% in the last three years.

“With this merger, Advanced Childcare now has the scale and expertise to offer integrated therapeutic and educational pathways to help such children achieve a better future. These end-to-end care pathways allow us to assist Local Authorities in reducing lifecycle costs and to champion positive outcomes for looked-after children” said Riz Khan, Founder and CEO of Advanced Childcare.

Iain MacRitchie, the outgoing Chairman of Continuum Group, commented, “This is a very exciting time and the start of a new chapter in Continuum’s development, adding further breadth and depth to the services we can offer. The House of Resilience care model that we pioneered encompasses a range of sector leading clinical intervention programmes, educational provision, residential care and family support services. These programmes, driven by hugely committed staff, have made significant positive differences in the lives of many troubled young people. The merger with another high quality, innovative provider, Advanced Childcare, creates a group with over 1400 highly talented carers and educationalists.”

The combined company will have 143 children’s homes with 416 placements, 15 special schools and over 100 fostering placements, employing over 1400 people. Organic growth plans will see the Company expand further, adding 875 new jobs over the next 4 years.

Buyers at the highest calibre are continuingly changing as their companies expand and lately we have seen a huge push into acquiring businesses with good solid owners willing to stay on. As such they are prepared to pay for it and for the owners there can be many benefits.

Best Price – The importance on having good senior management and ease of transition can help in the value of your business. Generally it can mean the difference in a fully years net profit in additional value.

Exit Strategy – Planning an exit is always going to be difficult but having the security of a suitable buyer and job in the process can help you work towards and end date with the purchaser when you see fit.

Less stress – Many of your daily headaches and problems can be taken care of at head office. When owners sell their centre they are expected to run the business as usual without the dutiees of paying the bills, wages and rent.

Support – Having a large organisation behind you can help overcome changes in the work place, finding new staff, new regulations and competitors. With their capital position and brand they can impact adverse issues far quicker than a private operator.

The benefits can extend well beyond the ones mentioned above but the main thing to remember is to not wait until the day before you decide to sell as it will impact price and the ability to sell the business at all.

For further information feel free to contact Sean Collins on 416 824 6837 or seancollins@collinsacquisitions.com.au

Reported in the Goldcaost.com.au by Nick Nichols, business editor.

GOLD Coast-based G8 Education has put to bed any lingering doubts about the commercial viability of the childcare sector with a stunning surge in profit.

The childcare centre operator has reported a $13.91 million net profit for the year to the end of December — 208 per cent up on a year earlier and 9 per cent ahead of expectations.

The result has been buoyed by a series of acquisitions through the year, despite a troubled and unresolved venture into Singapore.

Legal costs in Singapore took $956,000 off the bottom line, but this was outweighed by a $4.29 million write-back of an earn-out already accounted for in the books for an earlier acquisition.

The G8 result buries for good the ghost of Eddy Groves’ ABC Learning Centres which collapsed in 2009 and threw into doubt the commercial viability of the childcare sector.

G8 Education, which controls 206 childcare centres in Australia and Singapore, is now the sole childcare company listed on the Australian Securities Exchange.

Its business strategy is significantly more conservative than that of ABC Learning.

“The underlying business hasn’t changed,” G8 managing director Chris Scott said.

“What’s changed is the multiples on which they’re sold.”

G8 has stuck firmly to a format of buying childcare centres on multiples of about four times earnings.

Mr Scott said during the boom years, ABC Learning was acquiring centres on multiples of 10 to 12 times earnings and, in one case, 76 times the earnings.

“We’re disciplined about what we pay for these businesses,” he said. “If you start paying too much you can’t get a decent return.”

Mr Scott conceded G8 was in a “sweet spot” at the moment, with childcare centre prices subdued by constrained capital markets.

The latest G8 result was delivered on a 115 per cent lift in revenue to $142.89 million and a 98 per cent lift in expenses to $118 million.

Pre-tax profit surged 309 per cent to $22.69 million.

G8 has rewarded shareholders with a 50 per cent increase in dividends to 6 a share. The company pays its dividend quarterly, with the first 1.5 instalment of the increased dividend to be paid in April.

Mr Scott said G8 was expecting a judgment on its stoush with Singapore’s Cherie Hearts Group before the end of next month.

G8 shares jumped 4 to 86.

Edleun (EDU-X0.79-0.03-3.66%), the private-sector company storming into Ontario as part of its plan to dominate the Canadian child-care industry, has kicked up a fuss with people who question whether it’s an area in which large corporations should profit.

Reasonable people can see both sides; however, that debate is beyond the purview of VOX. Instead, our question is whether investors can profit from owning Edleun shares. In this as well, reasonable people can see both sides — but, in my opinion, a deep amount of skepticism is warranted.

First, a little history. Edleun (for “Education Learning Universe”) is practically a startup, as it acquired its first 11 day-care centres in Alberta in May, 2010. It simultaneously went public by merging with a dormant company on the Venture Exchange. Today, it has 38 centres, with six more coming via acquisition or new construction.

The company’s management, including CEO Ty Durekas and vice-chairman Leslie Wulf, have backgrounds in for-profit child care in the United States. Financial backing for the company comes, in part, from Jeffrey Olin and Gary Goodman of Toronto firm Vision Capital, two men with time spent working for Paul Reichmann at Olympia & York Developments Ltd.

Edleun sees a huge opportunity in a deeply fragmented industry where, it says, the other five biggest operators have just 1 per cent of Canada’s child-care centres. Growth can come, Edleun says, from both acquisitions and building new centres.

Citing Statistics Canada, Edleun says fewer than 20 per cent of Canada’s children under the age of six with mothers in the work force have access to a licensed child care space. This creates a “child care gap” of 2.2 million spaces, Edleun argues; even taking smaller government estimates that 165,000 new spaces are needed suggests 1,000 to 1,500 new centres are required.

Filling this need sounds like a fabulous plan, which leads one to wonder: If all this is so obvious, why hasn’t anyone done it before?

A look at a hypothetical acquisition suggests the case for Edleun rests on the company creating quite a bit of value, quickly, with very little investment.

The scenario, created a year ago by Desjardins Securities analyst Jeffrey Roberts, looks at what Edleun can do after paying $1.16-million for an existing child-care centre with real estate worth $800,000 and a business valued at $360,000.

The hypothetical business, a 6,500-square-foot centre with capacity for 100 children, has revenue of $662,000 and EBITDA – earnings before interest, taxes, depreciation and amortization – of $200,000. It has just 80 per cent of its spaces filled.

After the purchase, Edleun invests $200,000, primarily by improving the property. It introduces its nutritious menus and standardized learning program.

Occupancy rises from 80 per cent to 95 per cent despite a 5 per cent fee increase. Revenue goes from $662,000 to $825,000, and EBITDA climbs from $200,000 to $265,000.

The improved business leads to a higher implied rent, so the building’s value goes from $1-million ($800,000 plus the $200,000 in improvements) to $1.3-million.

And the business, which Edleun bought for three times its EBITDA (minus $80,000-a-year implied rent) is now worth 9.5 times EBITDA minus a new, implied rent of roughly $100,000 a year, or $1.53-million.

So, through one $200,000 investment and the implementation of the Edleun way, the value of the building and business more than doubles, from $1.16-million to $2.83-million.

Mr. Olin, an Edleun board member, does not dispute this scenario (and, in fact, subsequently hired Mr. Roberts to work for him at Vision Capital).

Edleun says it has already driven its same-centre occupancy from 79 per cent to 89 per cent since taking over, increasing same-centre revenue and operating profit by 28 per cent and 43 per cent, respectively.

However, we have heard variations on this theme before in the world of the “roll-up,” where companies buy up pieces of a fragmented industry at one, low EBITDA multiple, put those pieces together, and get a public valuation with a much higher EBITDA multiple. The problem is that the acquiring has always been the easy part; it’s the integration and operation where many, many roll-ups have stumbled.

It seems strange that in a country that supposedly has such a shortage of day-care options that there would be so many underperforming centres for Edleun to acquire and spruce up, or that it has a clear path to, in their words, “’Cherry Pick’ prime sites with [the] best demographics and location enabling premium price.” (Edleun’s answer to this, Mr. Olin says, is that a modern centre takes more capital than today’s mom-and-pop operators can muster.)

Edleun stock trades for around 83 cents a share, but since it has net losses and doesn’t even have positive EBITDA, trailing multiples are elusive. Assuming it can post about $8-million in EBITDA in the next year, as Standard & Poor’s Capital IQ does, Edleun’s enterprise value — market capitalization plus debt — is about 10 times EBITDA.

It is, in other words, already priced at the kind of multiple Edleun should command if everything goes right. Which would give investors an expensive education if Edleun can’t execute its profitable scenario.

Working parents in Edmonton have a new child-care option that offers a bright, airy downtown facility, guaranteed placement, emergency backup care, nutritious meals, education programs, no late pickup fees, and even eldercare services.

The catch is, you can’t use it unless your employer has signed up to be a client, and paid an annual fee starting at $5,000 for membership per company.

Kids and Company, a Toronto-based corporate-sponsored child-care provider, is opening its first Edmonton location, at 10304 108th Street, in the warehouse district. They offer full-time, part-time or emergency child care.

A few weeks away from opening, the centre held an open house Wednesday as parents toured classrooms filled with tiny chairs and tables, educational toys and puzzles, and an outdoor yard.

The daycare is only open to corporate clients, which include the University of Alberta and BMO. Their employees get a guaranteed spot. Parents also pay varying child-care fees, about $50 to $60 a day.

Victoria Sopik, a mother of eight, founded the company in 2002, with Jennifer Nashmi.

“The general public can’t have a spot in our centre and what that allows us to do for our corporate clients is guarantee child care for their employees,” said Sopik, the company’s CEO. “There’s no waiting list, there’s no chance they’re not going to get a space. We’re always open and available for them.”

The facility is provincially licensed, employs 40 teachers, and has space for more than 180 children from infants up to 12 years old, divided into classrooms of between 10 to 15 kids overseen by two teachers each.

“It’s play-based learning, so lots of what goes on when they’re one, two and three is learning things while they play, but we also have sign language, French, a Montessori program, dance, music and a great art program.”

Kids and Company has nearly 40 locations across Canada and will expand to 50 by the end of the year.

Sopik said it has tried to open in Edmonton for a long time but had difficulty finding a suitable site downtown with outdoor play space.

About 20 corporate clients have signed up so far. Sopik said Kids and Company is planning to open another three locations in Edmonton — one within a year and the others after seeing where the demand is.

The service is an employee recruiting and retention tool for companies, Sopik said

“Most employees will tell their employer that they’d love to have on-site child care, but employers don’t want to get into the business of being providers of child care. They don’t have the space or the liability. We take all that on and what they get for $5,000 is a guaranteed space.”

Statistics provided by Kids and Company say an estimated 45 per cent of working parents miss at least one day of work every six months due to child-care breakdowns.

The centre saves spaces for emergency child care.

“It could be there’s no school tomorrow. It’s a (professional development) day and you think ‘I can’t stay at home and look after my nine-year-old.’ We have a program that will look after your nine-year-old.”

Kids and Company also provides personal support workers or nurses to assist aging parents in home.

The University of Alberta says it partnered with Kids and Company because of increasing demand for daycare services. The five non-profit day cares around the campus are at capacity and have lengthy waiting lists.

Another client, BMO offers its employees up to 10 days of backup child care. In 2011, BMO staffers across the country used about 400 days.

“I’m a mom, and there’s nothing worse than when your child care falls apart and you’re trying to balance everything,” said Gabriella Zillmer, senior vice-president of human resources for BMO.

“We want to give them peace of mind and access to a safe and healthful environment for their children to go to so they cannot worry and focus on what they need to focus on in the workplace.”

Daycare company Edleun is teaming up with one of the nation’s largest landlords to bring much-needed new childcare spots to apartment buildings. The move is the latest piece in the Calgary firm’s aggressive expansion of its controversial model of for-profit daycare centres.

Under the deal, Edleun will convert common areas, pools or other spaces in buildings owned by the Canadian Apartment Properties Real Estate Investment Trust (Daycare company Edleun) into childcare facilities.

The first two daycares are slated to be built in the Greater Toronto Area. Each will be up to 1,800 square metres in size and accommodate about 100 children, said Ty Durekas, Edleun’s president and CEO. The plan is to have them running in nine months.

“We see opportunity to bring more availability of childcare to families that might not have access to childcare centres,” he said. “These are in established neighbourhoods where we couldn’t get in otherwise.”

Edleun’s plan is to eventually build daycares in Capreit properties across the province.

The plan takes advantage of Toronto’s large stock of decades-old apartment buildings, many of which house large numbers of children but lack amenities.

“If it wasn’t for these buildings, there wouldn’t be affordable housing for new immigrants, many of whom come with large families,” said Graeme Stewart, an architect who has worked on improving the city’s apartment blocks. “There’s definitely an absolute need for [daycare].”

He said Capreit has shown itself to be a conscientious landlord in being willing to allow improvements to its properties.

Edleun’s growth, however, is contentious – so much so that Mr. Durekas said he would not reveal the exact locations of the planned daycares for fear of attracting attention. He would say only that they were in the “central and eastern” parts of the GTA.

Critics of for-profit daycare argue money-making care in general is inferior to the non-profit variety because earnings that could otherwise be funnelled back into the service must be used to pay dividends.

“It’s capitalizing on a crisis in childcare in Ontario – why don’t we have childcare in some parts of Toronto? It’s because there’s a vacuum in public policy,” said Martha Friendly, executive director of the Childcare Resource and Research Unit.

Edleun maintains that it is simply plugging a gap in the market. There is a huge shortfall in the number of childcare spaces nationwide – as many as 165,000 – and daycare operators are feeling the squeeze as cash-strapped cities consider scaling back subsidies.

Late last year, the company made its first forays into Ontario, buying up nine daycares in Toronto, Mississauga and Windsor. It already owns more than 20 centres in Alberta and several in British Columbia.

CALGARY, Feb. 3, 2012 /CNW/ - Edleun Group, Inc. (“Edleun” or the “Company“) (TSX-V: EDU), the leading provider of quality early childhood education and care in Canada, announced today the details of the additional GreaterToronto Area child care centre referenced in the press release dated December 12, 2011. The centre which comprises 195 licensed spaces is in a prime location in the centre of Oakville, Ontario one of the most attractive residential communities in Canada.

Edleun is purchasing the assets of this operating child care centre for $800,000. The centre is located in premises leased from a third party under a long term lease. The centre is located on the western edge of the Greater TorontoArea and within easy commute to a number of key employment zones.

“This centre is being acquired on very favourable financial terms,” said Dale Kearns, Edleun’s Chief Financial Officer. “The vendors were extremely passionate about creating and delivering a high-quality child care environment and experience, however had no prior experience in the child care industry, and were unfortunately underfunded to accomplish their goals. We estimate that $2 million was spent on improvements to create this centre, making it one of the most attractive and high quality “as-built” centres Edleun has seen in Canada. Moreover, with the implementation of Edleun’s operational systems and programming, we are confident that we can improve the occupancy of this well-located and attractive centre.”

“With this acquisition we have a prime example of the tangible benefits we can deliver for the communities we serve and the broader child care sector,” said Mr. Ty Durekas, President and CEO of Edleun. “In this instance, we were not only able to preserve needed spaces that potentially could have been lost completely due to the Vendor’s shortage of capital, but are ensuring that the families utilizing the centre have a high quality child care option that they know will remain viable for the long term.”

The timing of the completion of the transaction is subject only to finalization of the child care license. The centre is being acquired utilizing the Company’s available capital and hence is anticipated to be highly accretive to the company’s profitability.

Edleun currently has a total of 4,641 licensed spaces in 44 Early Learning & Care centres, including centres owned and transactions previously announced to acquire, redevelop or build.

Early Years Childcare has an excellent reputation for providing quality care within the communities it serves, with seven of its settings receiving a ‘Good’ Ofsted outcome, and the remaining two in the top 10% of nurseries in the UK who hold an ‘Outstanding’ outcome. Early Years Childcare provides places in and around the Sussex area, Basingstoke and South East London.

Although no immediate changes to Early Years Childcare’s nurseries are planned, Busy Bees aim to work closely with nursery managers to share best practice and discuss opportunities for the enhancement of children’s experiences and continuous improvement. Busy Bees also look forward to investing further in the resources and infrastructure of each of the Early Years Childcare settings.

Ian Steel, the owner of Early Years Childcare, said: “Early Years Childcare took the decision to sell the business to Busy Bees after concluding that, as a large, well-resourced organisation, they are able to focus all their attention on expanding the business whilst ensuring the very highest levels of care and service to customers and their children.

“Busy Bees have shown tremendous dedication to the acquisition and have proved to be a reliable acquirer, making what could be a difficult transition for all involved, an efficient and straightforward transaction.”

Marg Randles, Managing Director at Busy Bees, commented: “We have been working closely with Early Years Childcare to ensure the handover goes as smoothly as possible for children, parents and staff. We recognise that any change may cause some nervousness but we will be keeping everyone informed every step of the way, as we support staff to constantly develop the excellent care, resources and services the nurseries currently provide. We have developed a well-respected and successful business over the last 28 years mainly through acquisition and remain passionate about the quality of care within our settings. We believe that Early Years Childcare is an excellent addition to our portfolio.

“We have been impressed with the commitment of the staff and their drive to provide an excellent service to children and parents. “Nursery managers and their staff teams will continue to play the most important role, working with children and families, both current and future.”

The Edleun Group, Inc. (TSXV:EDU) says its has completed the acquisition of three child care centres in the Greater Toronto Area involving 356 licensed spaces in a deal valued at $4 million.

The centres, which have 112, 83 and 161 licensed spaces respectively, are all located in premises under long-term leases “in a major commercial node of the Mississauga, Ont., area.”

All were acquired using the company’s available capital resources and will generate significant and immediate accretion to the company’s profitability, Edleun said in a release.

The company also said that, after due diligence, it had decided not to acquire a 70-licensed-space centre in Airdrie, Alta., a $900,000 purchase it had been previously considering.

Edleun now has a total of 4,641 licensed spaces in 44 early learning and care centres, including centres owned and transactions previously announced to acquire, redevelop or build.

Calgary, Alberta – Edleun Group, Inc. (“Edleun” or the “Company”) (TSX-V: EDU), the leading provider of quality early childhood education across Canada, announced today its initial Ontario acquisitions.

“We are extremely excited to begin our expansion into the Province of Ontario, which highlights our mandate as a truly national company and builds upon our success in Alberta and British Columbia,” said Mr. Ty Durekas, Edleun’s President and CEO.  “In Canada’s most populous province we are committed to delivering a quality educational experience for Ontario’s children, families and their communities which has proven to be appreciated and valued by parents in our current centres. Edleun’s industry-leading offering of educational curriculum, activity programs, nutritional meal programs and technology-based learning is making a difference for the children we serve. Moreover, and of great importance, is that we have taken leadership to expand and create new state-of-the-art child care centres to address the shortage in underserved communities.”

Edleun’s initial entry to Ontario is marked by its planned acquisition of seven centres, four of which are in the Greater Toronto Area and three of which are in Windsor. The details of the Windsor portfolio acquisition, which transactions have closed, are included herein. It is anticipated that further details on the centres in the Greater Toronto Area will be outlined shortly.

In Windsor, Edleun is acquiring The Children’s House Montessori portfolio, three centres of exceptional quality that are the market leaders in this community, for a total purchase price of $5.5 million. In total, the three well-located Windsor centres provide 485 licensed child care spaces. Two of the centres were planned and purpose-built as child care centres in 2006 and 2008 and the third is located in a leased facility with frontage on an arterial road. Edleun has entered into a long-term lease agreement for all three centres, with an option extending through 2012 to purchase the real estate in the two purpose-built centres. The Children’s House Montessori was voted the Best Child Care Centre in Ontario in 2010, and received the Windsor Chamber of Commerce business excellence award in 2008.

“Edleun is dedicated to developing our youngest learners. We create a world of learning and prepare children for the next steps in their education and life. Our philosophy and commitment is shared by the directors and staff of all of our new partners in Ontario and we are delighted to welcome them into the growing Edleun family of early learning and care centres,” said Mr. Durekas.   “Joining the Edleun family will provide the Montessori schools and child care centres with access to additional educational expertise and resources to supplement the exceptional learning environments that are already in place.”

According to Julie Roy, owner of the three Windsor Montessori schools that are now part of Edleun, it is anticipated that the directors and staff of all of the childcare centres and Montessori schools will remain in place.

“We know that we have experienced and dedicated directors and staff in these schools and centres who deliver an exceptional level of learning and care to the children. We understand how important this is, not only to the children but to their parents and the entire community. We are committed to fully supporting them,” said Mr. Durekas.

“We will continue to be an integral part of our communities with the same name and the same dedicated staff of professional early childhood educators. As well, as part of Edleun, we will be able to do even more for our families and become even more involved in the communities we serve,” said Ms. Roy.

This acquisition also marks Edleun’s first centres with Montessori-based programming. The Montessori program is internationally recognized as a unique, specialized and differentiated model to help develop skills in children that have been proven to enable them to excel throughout their school age years and into their adult years. Edleun anticipates that the expertise in the Montessori program will strategically benefit the company enabling it to expand this model selectively to benefit other centres and communities.

“All seven of the initial Ontario based child care centres will be acquired utilizing the Company’s available cash resources. As such, the centres are anticipated to be highly accretive to the Company,” said Dale Kearns, Edleun’s Chief Financial Officer “Upon completion of these acquisitions, the Company’s portfolio of quality child care centres will total 45 centres in three provinces providing 4,711 licensed child care spaces including centres owned and under development.”