Babson Capital Europe has completed a mezzanine investment in Busy Bees, the largest UK nursery chain.
The childcare company has been acquired by Teachers’ Private Capital, the private equity division of Ontario Teachers’ Pension Plan. The total debt package includes a mezzanine facility co-arranged by Babson Capital Europe.
Established in 1983, Midlands-based Busy Bees is the largest children’s nursery daycare provider in the UK. The business has grown both organically and via acquisitions, and currently operates 213 nurseries, where its 7,000 staff look after some 19,500 children on a daily basis.
The management team is led by chief executive John Woodward and includes managing director Marg Randles, chief financial officer Simon Irons, and development director Steve Eccleston, all of whom have a longstanding experience in the running of nurseries.
David Hirschmann, managing director at Babson Capital Europe, says: “We are very pleased to be supporting Teachers Private Capital’s acquisition of Busy Bees. The business is led by a high quality management team focused on the quality of care provided and the safety of the children as well as driving operational value and completing accretive acquisitions given fragmentation of the market. This transaction is consistent with our investment strategy, as the high level of recurring revenue, solid market fundamentals as well as the strong security and covenants package altogether provide good downside protection coupled with attractive mezzanine investment returns.
“This transaction further demonstrates the strong momentum for Babson Capital Europe’s private debt business and our full range of debt solutions, with six completed transactions since July 2013. Furthermore, our pipeline of investment opportunities appears to be very strong as European mid-market LBOs continue to transition to institutional lending.”
