HRC Law forecasts rise in children’s day nursery deals

The number of children’s day nurseries in the UK looking to sell following Britain’s decision to leave the European Union is rising, according to law firm HRC Law LLP.

The Manchester-based company’s corporate team has advised on seven deals in the sector over the last seven months, across four sales, two acquisitions and a multi-million-pound investment by the Business Growth Fund (BGF).

Of these, four were completed after the referendum’s Brexit result at the end of June.

HRC Law has said that the profitable and cash-rich nature of companies in the sector, coupled with the large number of nurseries still operating as single-site businesses, has stimulated interest from larger groups and prospective investors.

Mark Traynor, a partner at HRC Law, is a specialist in the day nursery sector and will speak at the Nursery World Summit in London later this year.

He commented: “The day nursery sector is extremely active at the moment, fuelled by an injection of private equity investment and larger operators seeking opportunities for strategic growth.”

HRC Law recently advised Kids Planet Day Nurseries on a £10m investment from BGF, following its acquisition of Yarrow House Nursery Group and Lymehurst Day Nursery.

The firm also advised on the sale of Yellow Brick Nursery Group to Complete Childcare, and Busy Bees’ acquisitions of both Bush Babies Nursery Group and Positive Steps Children’s Nursery Group.

HRC Law likewise advised on the sale of Canary Wharf-based Little Unicorn Nursery Group to Bright Horizons.

Speaking further, Mark said: “Family-owned businesses are ripe targets in the current market, with a large number of owner managers also showing a renewed interest in selling their business following uncertainty in the economy post-Brexit.

“We expect to see the number of deals in the sector increase before the end of the year. This will include sales, acquisitions and private equity investments, as larger groups look to capitalise on a potentially very profitable market.”