GI Partners acquires Advanced Childcare for £28 million

GI Partners (GI) announced it has acquired the UK’s leading provider of outsourced children’s care and education services, Advanced Childcare (ACL). GI is a leading private equity firm focused on investments in asset-intensive businesses and real estate platforms. The investment was for a consideration of £28 million.

Advanced Childcare is based in Stockport, Greater Manchester, and employs more than 350 people. ACL currently operates 30 residential care homes and a fostering service and has been awarded six regional contracts from local authorities in Manchester, Oldham, Birmingham, Wolverhampton, Bradford and Blackpool.

Alfred Foglio, Managing Director of GI Partners, noted that Advanced Childcare has pioneered the trend of managing children’s care services on behalf of budget constrained local authorities with residential childcare being one of the few services that the government acknowledges is less expensive if provided by the private sector.

Foglio said GI Partners believes that ACL offers an excellent opportunity from which to build a multi-regional childcare services platform due to its combination of best-in class management team, operational excellence and achievement of the highest quality ratings in the industry.

Foglio further stated that more often than not, local government authorities are choosing to close down older or inadequately-rated facilities and use a competitive tendering process to select proven providers who are willing to invest in new buildings and high-quality care models. Foglio said he believes that ACL can offer a compelling solution to local authority customers in this environment.

ACL is the latest addition to GI’s growing portfolio of specialist care and education companies. GI intends to use ACL as a platform to create a multi-regional, industry-leading childcare services business leveraging its significant experience in the healthcare industry to date.

GI already owns The Cambian Group, which it has built up through proactive management and selective acquisitions to become the U.K.’s largest provider of specialist services in education, mental health rehabilitation and learning disabilities. Cambian provides services for over 1,100 individuals in 60 facilities, works with 140 public authorities and employs more than 3,500 people. GI has similar growth aspirations for ACL and expects to invest additional capital through the platform.

Riz Khan, Founder and Chief Executive Officer of Advanced Childcare said the firm has been working closely with GI Partners on this acquisition for a number of months. Khan noted that the investment marks ACL’s next phase of growth.

The transaction was funded by capital from GI Partners Fund III L.P. and was supported by a conservative amount of debt financing provided by Yorkshire Bank.

27th March 2011