This article is from the Australian Property Journal archive
ABC Learning Centres has launched a $142.2 million off-market takeover bid for Kids Campus.
The purchase will add 106 operating centres to ABC’s portfolio with 8,000 places.
In addition, ABC had entered into a development agreement with the Community Infrastructure Development Fund. The deal with CIDF will give ABC a development pipeline on an exclusive basis for 40 future centres, totalling 4,000 places.
The centres to be acquired under the transaction represent an expansion of less than 10% of ABC’s existing global portfolio.
The acquired centres are in addition to ABC’s previous guidance of 850 centres in Australia and New Zealand by June 30, 2006 and excludes the acquisition of US based Learning Care Group, Incorporated which adds a further 322 owned centres, 132 franchised centres and six managed centres.
ABC now expects to start the new financial year with closer to 950 centres in Australia and New Zealand.
ABC’s chief executive of global operations Eddy Groves said the acquisition was expected to be earnings per share positive within year one and was forecast to generate earnings before interest, tax, depreciation and amortisation of approximately $180,000 per centre in fiscal 2007.
“The centres to be acquired represented an expansion of less than 10 per cent of ABC’s existing global portfolio,” Groves said.
The latest takeover follows ABC’s last acquisition US-based Learning Care Group in January this year for $218 million.
Last month, ABC reported a half year profit of $38.07 million for the six months to December 31, 2005 – an increase from $14.27 million recorded in December 2004.
In addition, ABC confirmed it was on track to meet its forecast full year profit of $88 million, while Kids Campus reported 25% increase in net profit to $1.73 million for the six months to December 31, 2005.
Yesterday, Kids Campus also announced that the Australian Education Trust has entered into two Heads of Agreement to buy 24 existing child care centre properties and up to eight other child care centre properties currently being developed.
The Kids Campus board has recommended shareholders accepted ABC’s takeover offer in the absence of a superior proposal.
The acquisition would be funded by a committed debt facility which would increase ABC’s gearing to around 36%.
By Kathryn O’Meara
