Fri, 20 Jan 2023 | BUSINESS NEWS
Property adviser Christie & Co has said it expects consolidation in the UK’s nursery sector to continue in 2023, after 2022 saw an “unprecedented” level of deal volume and value. According to Christie & Co’s 2023 Business Outlook report, 73 per cent of childcare and education professionals surveyed said they are planning to either buy, sell or both during 2023.
Christie & Co reported a 48 per cent increase in new instructions between 2021 and 2022, while completions increased 35 per cent. The report indicated that this was driven by the ongoing uncertainty and operational pressures facing owners in the sector, as well as the strength of pricing.
Pricing increased 6.3 per cent last year, while accepted offers were, on average, 17 per cent over asking price as buyers battled to acquire "quality” market share within the sector, pushing valuations up for the most desirable settings.
These figures illustrate how deal appetite and confidence returned strongly during 2022, following a year in which dealmaking was impacted by the ongoing fallout from the COVID-19 pandemic. Dealmaking appetite was driven by pent-up demand in the wake of the pandemic, as operators once again turned to acquisitions in order to drive growth, while ongoing pressures led to an increase in opportunities on the market.
M&A in the childcare and education sectors last year was driven by both growth and distress. Christie & Co’s Managing Director, Childcare and Education Courteney Donaldson commented that “while some businesses were sold for eye-watering prices […] others were unable to keep their heads above water due to financial, workforce, and capacity issues which resulted in an increase in business closures.”
2022 also showed a significant increase in buyers expanding their geographic profile, with 62 per cent of buyers acquiring nurseries within 50 miles of their existing operational hubs, compared to 2021, in which deals largely took place closer to buyers’ current operations. According to Christie & Co, this wider purview was driven by “corporates or groups with a national presence”.
Christie & Co’s Director and Head of Brokerage, Childcare and Education, Nick Brown commented: “2022 was a very busy year, with appetite right across the buying spectrum, from first-time buyers to regional operators, to the larger national groups. We are optimistic about 2023 and hope to see similar trends and activity for quality nurseries across the country.”
Looking forward to 2023, Christie & Co say they expect firms to continue to be impacted by rising energy costs, political instability and base rate increases and forecast an increase in borrowers targeting refinancing for small and medium-sized enterprises. However, the report adds that high-quality businesses are expected to be resilient against external pressures.
For M&A activity in 2023, Christie & Co makes a number of predictions, including that: the best settings, which are most sought-after by buyers, will command premium valuations; buyers will continue to look beyond London and the South East and consider acquisitions in all locations; regional consolidation will continue as operators look to protect their portfolios and footprint; further growth among expanding private equity-backed groups; greater due diligence due to potential policy changes and risk; high levels of demand for specialist childcare businesses and properties; high valuations as a result of demand among corporate and regional operators outstripping supply.
Read more about M&A in the childcare and nursery sector:
Consolidation resumes in the UK’s childcare sector.
Nursery sector consolidation continues as Kids Planet strikes another acquisition.
Find businesses for sale here.
If you are looking for an exit, we can help!.
The company is a well-established specialised contractor offering commercial decoration services across Central Scotland, known for its strong relationships with Tier 1 construction organisations and preferred contractor status. With a diverse projec...
This market-leading business specialises in bespoke, luxury kitchens and whole-house furniture, with expertise in handmade designs using responsibly sourced local hardwoods. Catering to high net-worth individuals, the company boasts a strong team and...
A well-established travel company with over 14 years of experience, it specialises in weekend breaks, five-day adventures, and summer holidays across the UK and Europe, offering the convenience of a door-to-door pick-up service. The business benefits...
FREEHOLD
07
|
Jul
|
Independent property firm acquires Blackpool estate agent | BUSINESS SALE
An estate agent based in Blackpool has been acquired by grow...
07
|
Jul
|
Poke restaurant chain acquires rival | BUSINESS SALE
Honi Poke has acquired rival poke chain Island Poké i...
07
|
Jul
|
MSP Contrac IT set for M&A growth after acquisition by telecoms group | BUSINESS SALE
Venridge Limited, a Yorkshire-based managed services provide...
07
|
Jul
|
PE-backed accident services group makes significant acquisition | BUSINESS SALE
Activate Group, an accident management services provider bac...
07
|
Jul
|
MSP Contrac IT set for M&A growth after acquisition by telecoms group | BUSINESS SALE
Venridge Limited, a Yorkshire-based managed services provide...
07
|
Jul
|
Poke restaurant chain acquires rival | BUSINESS SALE
Honi Poke has acquired rival poke chain Island Poké i...
Business Sale Report is the complete resource for finding genuine acquisition opportunities.
Join today to receive:
All this and much more, including the latest M&A news and exclusive resources
Please choose your settings for this site below. For more information please read our Cookie Policy
These cookies are necessary for our website to function properly and provide you with access to all features.
These are analytics cookies that help us to improve the way our website works.
These are used to improve the functional performance of the website and make it easier for you to use.