Quadrant pauses $1b Affinity auction, eyes ACCC childcare report
Quadrant Private Equity has decided to defer its childcare business Affinity Education’s mooted sale until next year, Street Talk understands.
Sources said Quadrant and its sell-side advisers, Barrenjoey and Jefferies, have hit pause to allow Affinity’s suitors time to digest ACCC’s report on its inquiry into childcare. The interim report was released on October 1, but the final version is yet to be handed down.
Affinity has acquired more than 50 early childhood education centres since 2021. Chris Hopkins
The PE firm opened a data room in late August, after receiving inbound approaches for Affinity. It was tipped to be one of the biggest childcare deals ever in Australia, expected to be worth north of $1 billion.
Quadrant acquired Affinity from Anchorage Capital Partners for about $650 million in June 2021. At the time, Affinity had about 150 centres and was making $65 million in annual earnings before interest, tax, depreciation and amortisation.
Potential backers were told Affinity has acquired more than 50 early childhood education centres since 2021. It has also opened several greenfield centres, putting it in charge of more than 200 centres across six states.
The sell-side pitch talked up Affinity’s management team’s credentials and industry tailwinds. Early childcare education is seen as critical social infrastructure, with a circa $14 billion market locally and 9 per cent to 10 per cent annual growth rate.
With Affinity off the auction block for now, all eyes will be on Partners Group’s Guardian Childcare and Education.
Guardian, which targets higher-priced socioeconomic areas, last fetched $400 million to $500 million when Partners bought it off Navis Capital in 2016.
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