ABC Learning Centres Ltd signed a conditional contract today to buy 115 childcare centre businesses from Peppercorn Investment Fund for $A42 million, part of a process begun in September to merge the interests of 3 Australian childcare businesses into a single listed entity owning 550 centres & managing 228.
ABC and Peppercorn Management Group Ltd issued an information memorandum on 27 October for their proposed merger, and Child Care Centres Australia Ltd has a separate leg of the merger under way.
Investors in Child Care Centres Australia and Peppercorn Management Group will have separate scheme meetings to approve the merger on Friday 3 December in Brisbane
Peppercorn Management Group extended its interest to New Zealand in June when it secured management rights for 52 centres owned by Kidicorp Group Ltd, New Zealand’s only listed childcare company.
The addition of the 115 Australian Peppercorn centres required a memorandum of understanding to be signed in October with David Graham, whose company DDH Graham Ltd is Peppercorn’s responsible entity, but the price of the transaction was only agreed today. The deal involves a possible 3 more centres being added to the transaction.
ABC will use an $A300 million capital-raising to effect the merger. Post merger, the group will have market capitalisation exceeding $A800 million and the liquidity to consider further growth.
Peppercorn was started in 1993 but ABC came on the scene only in 2001.
The Peppercorn fund is to remain in business as a property trust, operating ABC centres, getting a supply of centres from ABC then acquiring more on market itself.