West, Isis groom nursery groups for IPO

The London-based mid-market investors have merged their holdings in the UK nursery sector in preparation for an exit in 2005.

London-based mid-market financial investors West Private Equity and Isis Private Equity have announced the merger of their respective portfolio companies Asquith Court and Kidsunlimited to create a nursery business with 145 UK locations.

The new business will be trading as Nursery Years Group. In the 12 month ending April 2004, the new entity had pro-forma sales of £45 million (€68.1 million; $82.5 million).

West’s Jeremy Hand and Adam Holloway of Isis led the transaction on behalf of their respective firms.

According to a source familiar with the situation, the tie-up is part of an exit strategy designed to lead to a floatation of the business on a UK stock exchange some time in 2005. 

Financial details of the transactions have not been disclosed. However, based on Nursery Year’s combined earnings, an IPO could value the company at up to £150 million, the source said. 

West Private Equity invested in Asquith in May 2001 when the company underwent a management buyout. In addition to 104 private nurseries that are now part of Nursery Years, the company also runs 20 independent day schools which have been demerged and continue to be owned by West.

Isis first backed Kidsunlimited in June 2001.

Nursery Years currently looks after approximately 17,500 children across several UK regions including Greater London.