24/03/2014 - 13:43

WA childcare group sold for $65m

24/03/2014 - 13:43

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Western Australian childcare entrepreneur Rory Vassallo has sold his portfolio of centres to listed company G8 Education, which has announced two major national acquisitions in the space of six weeks.

WA childcare group sold for $65m
Vassallo Corporation owner Rory Vassallo.

Western Australian childcare entrepreneur Rory Vassallo has sold his portfolio of centres to listed company G8 Education, which has announced two major national acquisitions in the space of six weeks.

Mr Vassallo confirmed to Business News that his 22 centres were among the assets purchased by G8.

The Vassallo sale was part of a larger deal announced on February 10, when G8 said it had acquired a total of 63 childcare centres across the country for $105 million.

While Mr Vassallo wouldn’t go into details of the transaction, Business News understands G8 paid about $65 million for his centres, which Mr Vassallo - a former 40under40 award winner - built up over 10 years.

Business News also understands that most of the remaining centres bought by G8 in the February 10 announcement were based in the eastern states.

Confirmation Mr Vassallo had sold his business came as G8 announced today that it had also acquired Sterling Early Education – a relative newcomer to the childcare industry, which is privately owned and holds 77 centres across the country.

About 20 of those centres are located in WA.

The acquisition of Sterling is also part of a larger deal in which G8 will acquire a total of 91 centres for $228 million from a variety of vendors.

As a result of the two acquisitions – the February 10 announcement and today’s announcement – G8’s suite of childcare centres will increase from 234 to 388, and mark the company’s entry into WA.

It will make it one of the biggest childcare operators in Australia, along with not-for-profit group Goodstart Early Learning, which has about 640 centres.

Following today’s news, G8 requested a trading halt of its shares pending a share placement.

The sale of Sterling comes after the company had been growing its portfolio of centres by acquiring sites around the country in preparation for an initial public offering.

However, the company cancelled an IPO earlier this month after it was seeking to raise $200 million.

The company was looking to price its stock at between $2 and $2.30 per share and had appointed Macquarie Capital to lead the bookbuild.

G8 Education declined to comment when contacted by Business News.

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