OTPP readies Busy Bees for early 2023 sale via Rothschild, JPM as sponsors circle – sources

Breaking News 27 October

OTPP readies Busy Bees for early 2023 sale via Rothschild, JPM as sponsors circle – sources

Ontario Teachers’ Pension Plan (OTPP) is preparing to launch a stake sale of Busy Bees Nurseries in early 2023, three sources told this news service.

JP Morgan and Rothschild are appointed as sellside financial advisors, these sources said.

A process could launch as early as 1Q23, one of them noted. Originally slated for a launch after the summer, OTPP is waiting for a better window, one of the sources said, with another adding that the vendor had to rethink the timing due to rising inflation.

OTPP and minority owner Temasek intend to dilute their position while retaining a solid enough equity position to benefit from potential future upside, one of the sources said. The fund owners can also roll over existing, favourable debt packages, the source explained.

Nonetheless, OTPP has yet to decide the perimeter of the sale, one of the sources said, noting the vendor indeed seemed inclined to part with less than 50% of the business, but had not ruled out a full sale.

Busy Bees is being marketed off EBITDA between GBP 200m and GBP 225m, two of the sources said. The business had adjusted EBITDA of GBP 177m in 2021, a further source said.

The company could reportedly fetch between GBP 2.5bn-GBP 3.5bn. The Rothschild appointment was reported in November last year.

Several large cap private equity firms are circling the asset, four sources noted.

Advent, KKR and Blackstone are interested in the asset, two of the sources said. CBBIP is also keen, one of the sources said, along with Jacobs Holding, a Swiss family office, another of the sources said. Goldman Sachs infrastructure arm is also “hovering”, one of the sources said.

CVC was mentioned as previously interested, but they are not actively pursuing the asset, one of the sources noted.

EQT’s infrastructure fund is also in the mix, but it is still gauging whether the asset is a good fit for its portfolio, one of the sources explained. Cinven and Eurazeo are also logical suitors, one of the sources said.

Antin Infrastructure-backed and France-based Babilou is a peer that recently transacted, as reported. Another France-based peer is Towerbrook and Bpifrance-backed La Maison Bleue which is currently involved in an ongoing process.

Eurazeo and Bpifrance-backed Grandir – another peer – is expected to continue its planned inorganic growth strategy, as reported.

Established in 1983, Busy Bees is a UK-headquartered, global provider of childcare, caring for over 50,000 children across nearly 419 nurseries in the UK and Europe, and over 850 sites globally.

Outside Europe, Busy Bees also operates in Singapore, Malaysia, Canada, Australia, and China, according to its website.

OTPP acquired a majority stake in Busy Bees in 2013. In December, 2017, Temasek acquired a minority stake in the business.

Having grown substantially since the OTPP acquisition, primarily through numerous M&A deals, Busy Bees had its eyes set on Singapore-based Carpe Diem in April but, as reported, a deal has not yet materialised. In September 2021, Busy Bees acquired Irish counterpart Park Academy Childcare.

This table shows a selection of recent transactions that Busy Bees has done, according to Dealogic data:

Busy Bees currently has an LTT (Likely To Transact) score of 65.70 out of 100, according to Dealogic data; the higher the score, the higher the likelihood of an imminent transaction.

Busy Bees, OTPP, Temasek, JP Morgan, KKR, CPPIB, Advent, Jacobs and Blackstone all declined to comment. Rothschild, EQT, Partners Group and Goldman Infrastructure did not respond to requests for comment.

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