Childcare service provider ABC Learning Centres has paid $US33.7 ($AU45 million) for 24 centres in southern California in United States.
The centres are currently owned by GFGTT Holdings Inc and will acquired by ABC’s US subsidiary Tutor Time.
As part of the purchase agreement, GFGTT will also provide for the future development of centres on the West Coast, with two currently in construction phase.
The centres, which currently operate under the Tutor Time franchise system run by the Learning Care Group consist of 3,262 licensed places.
In addition, Tutor Time has recently acquired three franchised centres with 540 places and has entered into Letters of Intent for a further four centres with 720 places.
The average size of the 24 centres is 188 places, three times the average centre size of ABC’s current Australian portfolio.
ABC expects the 24 centres will contribute an EBITDA of approximately $US7.1 million annually equating to a combined acquisition EBITDA multiple of 4.7 times.
ABC’s chief executive of global of operations Eddy Groves said the company is pleased to have been able to secure a large group of premium centres as part of our previously announced strategy to acquire the franchised Tutor Time centres.
“As these centres already operate under the Tutor Time system, the integration process will be simple and very cost effective and we will be able to leverage our existing head office in the US,” Groves said.
Settlement of the 17 California centres is proposed by August 2006.
The company is currently at various levels of negotiation in respect of further potential purchases of franchised businesses.
By Adam Parsons
