ASX-listed Think Childcare gets a $79 million bid from Alceon Private Equity

  • November 16, 2020 03:29 PM AEDT
  • Hina Chowdhary
    Hina Chowdhary
    Director, Equities Research Hina Chowdhary
    1706 Posts

    Hina Chowdhary is the Director, Equity Research at Kalkine and has an extensive experience of about 15 years in the area of Research, which includes 5+ years in Equities Research particularly.She has earned a Master of Science degree from the renowne...

ASX-listed Think Childcare gets a $79 million bid from Alceon Private Equity

Summary

  • Alceon Private Equity has offered $1.35 per security to acquire Think Childcare Group. It is willing to settle the transaction in all cash or a combination of cash and unlisted shares. 
  • Think Childcare Group has allowed Alceon an exclusive due diligence period, which ends on 18 December 2020. 
  • The childcare facilities owner has also announced the acquisition of four facilities for a sum of $8.4 million. The acquisitions were funded from cash reserves. 

Think Childcare Group (ASX:TNK) has received an indicative acquisition proposal from Alceon Private Equity. The company operates childcare facilities in Australia for children between the ages of six weeks and six years. 

Alceon Group is a renowned financier and multi-strategy alternative investment manager in Australia. It also has stakes in several ASX-listed firms. Alceon Group invests in mid-market private equity and growth equity opportunities. 

Alceon is offering TNK security holders a $79 million offer - worth $1.35 per security, which represents a 16% premium to 10-day trading VWAP of $1.16. 

It has proposed an all-cash consideration for the transaction or a combination of cash and unlisted shares. 

Think Childcare has established an Independent Committee of the Group’s Board of Directors. The committee has recommended providing exclusive due diligence period to Alceon Private Equity. The due diligence period would run until 18 December 2020. 

Although due diligence period has been granted by the childcare facilities operator, the completion of the transaction is contingent on several conditions, including funding, regulatory approvals, security holder approval, court approval. 

MinterEllison is a legal advisor on the transaction to Think Group and Moelis Australia is acting as the financial advisor.

Related: Stocks to Benefit from Old Child Care Subsidy Coming Back into Action  

Think Childcare acquires four childcare services

Along with the announcement of the takeover proposal, the company reported that it had acquired four Nido childcare services. 

Among the acquisitions, two were acquired within the Group from Think Childcare Development Limited. 

These two acquisitions also underscore the Group’s internal incubation model. The other two were acquired from a third party incubator. 

The purchase price is for a consideration of $8.4 million. Think Childcare expects CY21 EBITDA of $2.1 million from the acquisitions. 

All services are trading at an average utilisation of more than 90%. The acquired services are located in metropolitan areas. Three services are located in Western Australia, and one is in South Australia. The acquisitions were also funded from available cash reserves. 

On 16 November 2020, TNK was trading at $1.3, up by 4% from the previous close. 

 

 


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