NOW THE BIG GUNS WANT A PIECE OF CHILDCARE BOOM

Written on the 9 February 2015 by Nick Nichols

NOW THE BIG GUNS WANT A PIECE OF CHILDCARE BOOM THE Australian childcare sector is fast becoming hot property, with US funds manager Morgan Stanley the latest to join the chase for riches with the aid of Gold Coast partners.

Morgan Stanley Real Estate Investing has teamed up with Southport-based Affinity Education Group (ASX: AFJ) following a buyout deal that saw the US giant snare the assets of Broadbeach-based Australian Childcare Projects.

ACP has a management deal in place with Affinity Education and that agreement is set to continue with Morgan Stanley in the wake of the buyout.

Affinity says the agreement will allow it to increase childcare centres under management and deliver a pipeline for future growth.

"It's a testimony to the strength of the Affinity Education platform that we have joined with ACP and Morgan Stanley to pursue further opportunities together," says Affinity CEO Justin Laboo.

ACP is a relatively new player in the market, established in 2013 with a focus on developing and operating childcare centres. Last week it affirmed its commitment to an "aggressive growth strategy".

"ACP aims to be the pre-eminent developer and operator of childcare centres in Australia and Morgan Stanley's involvement will assist this process on a number of levels," says ACP's CEO Craig Napier.

However, both ACP and Affinity have a way to go to match the growth of the Gold Coast's biggest listed company, G8 Education (ASX: GEM).

ACP, which operates the Petit Early Learning Journey and the Master & Miss Early Learning Academy brands, has 12 childcare centres on the eastern seaboard with a total of 1300 childcare places. Affinity owns 152 centres with 11,600 childcare places but has yet to post a maiden profit.

G8 Education, which reignited the corporate push back into the childcare sector in the turmoil that followed the collapse of Eddy Grove's ABC Learning Centres in 2008, has 437 childcare centres with a daily licence capacity of 31,156 children.

G8 Education has a market capitalisation of around $1.6 billion, while Affinity is sitting around $250 million.

The Australian head of Morgan Stanley Real Estate Investing, Chris Tynan, says the childcare sector is showing strong fundamentals, backed by government policy to provide quality childcare services for working families.

"Morgan Stanley Real Estate Investing is excited by the opportunity to invest in ACP at this relatively early stage of it evolution," says Tynan.

"Though ACP is a young entity it has already built an excellent pipeline of development projects under a strong management team that have a track record of success and deep operating knowledge and experience in the sector."

Affinity's shares hit a high of $1.53 in early trading today.



Author: Nick Nichols

Latest News

BELLAMY'S FINDS EXPORTING BABY FORMULA INTO CHINA IS NO CHILD'S PLAY

BELLAMY'S (ASX: BAL) shares have suffered a 40 per cent drop in value today after the company hit a regulatory...

BRISBANE WATCH BRAND ADINA AIMS FOR ICONIC

ADINA watches is at a turning point in its history, 45 years after being founded by Robert 'Bob' Menzies i...

WHY YOU SHOULD CARE FOR YOUR BODY AS MUCH AS YOUR BUSINESS

ENTREPRENEURSHIP is a busy business. It can be all-consuming, but it is important not to neglect your health Y...

BULLETS BACK IN THE BUSINESS COMMUNITY

ALTHOUGH new to the current south-east Queensland sporting landscape, the Brisbane Bullets have a rich basketball ...

Related News

JB HI-FI IS THE GOOD GUY IN $870 MILLION ACQUISITION

ELECTRONICS giant JB Hi-Fi has formally completed its $870 million acquisition of home appliance chain The Good Gu...

ACCC ACTS AGAINST MERITON'S RIGGED REVIEWS

MERITON Property Services is under fire from Australia's main consumer watchdog, after it allegedly engaged in mi...

ACCC FIRES WARNING SHOT TO IVF PROVIDERS

IVF clinics have been put on notice by consumer watchdog, the Australian Competition and Consumer Commission (ACCC...

BIG W CEO QUITS AFTER 11 MONTHS

SALLY MacDonald has resigned as chief executive of BIG W ending her tenure at the helm of the struggling discount ...

Contact us

Email News Update Sign Up Contact Details

Subscribe to our mailing list

* indicates required
Email Format

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter