Nido trainingthe newest early childhood education and care (ECEC) company founded by Think Childcare’s founder, Mathew Edwards, has initiated the process that will result in it becoming an ASX-listed company Australian Financial Report (AFR) has reported.
The company seeks to raise $99.2 million by selling 99.2 million shares at $1.0 per share. The offering is scheduled to open on September 21, 2023. If all goes according to plan, the shares will start trading on the ASX on October 16, 2023.
The company’s implied market capitalization, should the IPO be successful, will be about $220 million, or about 8.0 times its forecast earnings before interest, taxes, depreciation and amortization (EBITDA) for 2024, making it the second largest publicly traded operator behind G8 Education makes.
The proposed listing comes just twenty-two months after Mr. Edwards’ previous venture Think Childcare was sold to Busy Bees Australia for around $195 million.
Nido plans to own 52 centers listed on the stock exchange and pursue an incubator model for growth
Mr. Edwards and his team currently own and operate a portfolio of 28 centers but will use a significant portion of the proceeds from the offering to acquire an additional 24 centers, bringing the total portfolio size to 52 post listing.
Going forward, the group intends to further expand the network by implementing an incubator model, where a third-party developer builds a center and hands it over to an incubator, which then secures Nido as manager after opening.
Nido receives an initial fee and an annual management fee in exchange for using his ramp-up expertise to increase the center’s occupancy rate to a level that then triggers an option for NIdo to acquire the company from the incubator.
The incubation model is expected to be the key driver of Nido’s growth plans, with up to 32 centers expected to be in incubation by the end of 2024.
Nido’s IPO news marks the latest corporate development in the ECEC space
Confirmation that Nido’s IPO process had begun marked the end of a busy week of ECEC news from the company, during which both Mayfield Childcare and Embark Education Group reported half-year results and the long-awaited Affinity Education Group sale process began.
Affinity, owned by Quadrant Private Equity, began discussions with investment banks and advisors about a strategic review and potential sale of the group back in March 2023, but the deal was put on hold for a variety of reasons, including uncertainty about the outcome of the ACCC price request in ECEC field.
According to the AFR the process of finding a new owner for the company and its more than 200 day care centers is now underway.
It is not yet clear what the status of the sale of Guardian Childcare & Education is.
Partners Group – the Switzerland-based owner of Guardian – had reportedly hired investment bank Morgan Stanley to sell the group in March 2023, but no deal has been confirmed so far.
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