Half a mill for PIF in recent crumb...

Half a mill for PIF in recent crumb collection?
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Affinity Education latest childcare operator to join buying spree

Date April 9, 2014 Jessica Gardner

Childcare operator Affinity Education has increased the price it is willing to pay for growth, announcing it will buy 51 centres in an $80-million deal that is equivalent to about two-thirds of its market value.

The deal is a sign that two major corporate operators, Affinity and G8 Education, are willing to break their own internal rules on how much they will pay to buy up centres in the fragmented sector, which is dominated by independent operators.

After listing on the Australian Securities Exchange in December 2013 with a promise to keep the price of acquisitions under 4.1-times future earnings before interest and tax, Affinity said it would pay 5.2-times EBIT, on a rolling 12-month basis, for the latest collection of centres. The $80 million purchase price is composed of $65 million in cash and about $15 million in shares.

The deal follows G8's acquisition in late March of 91 centres for $228 million, at a price of 5.79-times EBIT in the 2015 financial year. G8, which is the largest for-profit childcare operator with 388 centres and about 6 per cent of the market, said this latest acquisition was a one-off and it would return to paying lower prices in future.

Read more: http://www.smh.com.au/business/affinity-education-latest-childcare-operator-to-join-buying-spree-20140408-36b5o.html#ixzz2yLnKxt3l
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