G8 SNARES 19 CENTRES FOR $25.7M
10 July 2014, Written by Nick Nichols
G8 EDUCATION has boosted its portfolio of childcare centres by 19 following separate purchase deals with a number of vendors totalling $25.7 million.
The listed Gold Coast-based childcare centre operator says the acquisitions, to be funded from existing cash reserves, will settle in October.
The cash outlay for the centres will comprise $24.3 million on settlement, plus a further $1.4 million dependent on the centres achieving pre-tax earnings targets.
The centres have been acquired just under G8 Education’s target multiple of four times earnings.
“The acquisition of these premium centres at 3.9 times anticipated EBIT for the 12 months post settlement is another key milestone in the group’s acquisition strategy,” says G8 Education’s managing director Chris Scott.
“The centres are expected to contribute to EBIT (earnings before interest and tax) immediately upon settlement.”
The latest deal boosts G8’s childcare places by 1213, taking its total Australian portfolio to 29,703 childcare places.
Earlier this year, G8 Education bolstered its finances through a $150 million debt raising. The funds come on top of $120 million previously raised through debt issues since August last year.
Some of those funds were used to retire about $46 million in senior debt with the Bank of Western Australia, while the remainder has been set aside for further acquisitions.
G8 Education says it currently has no secured debt.
Author: Nick Nichols