Early childhood education company Think Childcare (ASX: TNK) has added four news childcare centres to their network on the same day the operator has received a takeover offer at a notable premium on their share price.
The takeover bid comes from private equity company Alceon Group at an indicative price price of 1.35 per share which represents a 16% premium on TNK shares’ 10-day volume weighted average and a 23% premium on the 1-month VWAP.
Under the offer, Alceon values Think Childcare at $82.4 million.
While the proposal will undergo a 1 month exclusivity period as Think Childcare assesses the offer, the Company has advised shareholders not to take action which will give the marker time to react to the acquisition of four new childcare centres.
Of the four new centres, two have been acquired from Think’s internal incubation program and are all trading with more than 90% occupancy, a rate notably higher than the average amongst ASX-listed childcare operators.
Market leader G8 Education (ASX: GEM) reported 69% occupancy across their network on 24 September.
Between the new centres (3 located in Western Australia and 1 in South Australia), the additions have been acquired by Think for $8.4 million, offering a total of 358 places for children at an average of $127 per day. Between them they are expected to deliver $2.1m EBITDA annually.
Two of the purpose-built Nido branded centres were developed through Think’s incubator program which drew down $917k of capital investment to be sold at $3.8m with an average break even time of 5 months. Under the program, Think Childcare Development has a further 23 sites in the program which can be sold back to Think, or externally.
Earlier in the month, Think increased their CY20 EBITDA guidance form $15-17m to $22-23m.
Alceon Group is an independent investment firm with a real estate portfolio and more than $2 billion in capital under management.
Prior to the announcement of the takeover offer at $1.35 per share, TNK shares closed on Friday at $1.25.
Alfred Chan is a Business Reporter at The Sentiment specialising in ASX-listed small cap companies, a bloodstock enthusiast and former equities analyst.
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