A nursery chain started in the room of a converted house by parents whowere unable to find suitable childcare for their families has become thelargest group in the UK, after a deal worth 31.2m.
Last Monday Busy Bees, previously the sixth largest nursery group,bought Leapfrog Day Nurseries, a division of Nord Anglia Education,which had itself long held the crown of the UK's largest chain (seeNews, page 4).
The deal is dependent on the votes of Nord Anglia's shareholders at anExtraordinary General Meeting expected to take place next month.However, Nord Anglia's board has recommended the sale in 'the bestinterests' of the shareholders so that the company can forge ahead withthe expansion of its international schools and learning servicesdivisions.
It is just eight months since Busy Bees was itself bought by theAustralian group ABC Learning Centres, the world's largest daycareprovider, for 71m.
At the time, ABC chief executive and founder Eddy Groves made it clearthat he had been attracted by the 'innovative voucher system' operatedby Busy Bees.
Busy Bees childcare vouchers are used by more than 70,000 workingparents employed by, among others, Asda, Sainsbury's, BAE Systems andover 300 health and police authorities.
The company has recently spent over 1m on new administrativesoftware for the vouchers business, and Leapfrog's voucher scheme willbe integrated into the new enhanced system.
Nord Anglia's chief executive, Andrew Fitzmaurice, told Nursery World,'Busy Bees is a great home for the business. Lynn and John Woodward havebeen in the industry for more than 20 years and this works foreveryone.'
He added, 'Leapfrog staff have worked really hard and I'm personallysorry to say goodbye to them.'
The sale of Nord Anglia's nurseries will come as no surprise to many inthe industry. Nord Anglia has been trying to off-load the division forsome time and it has struggled to make any profit from its rapidexpansion. Like many nurseries, it was hit by falling occupancy, with alow of 50.5 per cent last September.
Nord Anglia's nursery business grew quickly. In 2003 the group owned 25settings under the Princess Christian name, but in September that yearit bought the nine-strong Petits Enfants chain in the first steps tobecoming a major player.
This was closely followed by the 60m deal to buy 39 Leapfrognurseries in May 2004. That month it added the ailing Jigsaw chain of 28nurseries for 13.2m.
The winter 2004 issue of Nursery Chains listed Nord Anglia as offering9,833 places at 103 nurseries.
But staff morale took a tumble following the BBC documentary 'NurseriesUndercover' in August 2004, which exposed severe breaches of care andbad practice at the Teddington site previously owned by PetitsEnfants.
There were difficulties integrating the three groups into one chain.Financial results for February 2005 saw Nord Anglia's pre-tax profitsslump from 4.1m to 1.1m and shares fell.
In 2005, cost-cutting measures led to staff at some Leapfrog nurseriesclaiming they had been asked to clean and work in the kitchens. Leapfrogstaff turned to the Nursery World online forum to share stories ofshortages of essential items like soap and baby wipes and of feedingchildren packet minestrone soup. One nursery had a salmonellaoutbreak.
Last year the group took action by re-branding the nurseries under theLeapfrog name and holding workshops for managers and staff with the aimof boosting morale. A confidential e-mail address was introduced foremployees to raise their grievances anonymously.
Earlier this year the nurseries' fortunes took a turn for the better.Occupancy rose in May for the first time since the company bought Jigsawand Leapfrog.
THE RISE OF BUSY BEES
1983: Lynn and John Woodward and their friends Margaret Randles andDavid Thackery, unable to find the childcare they want for theirchildren, sell their homes and move into a big house in Lichfield,Staffordshire, converting the downstairs into a nursery and moving intothe upstairs flat. Most of the group had been teachers.
2000: Busy Bees secures 50m from private equity company GreshamTrust. Buys Copperbeech Day Nurseries, St Albans, and Tibbitots DayNurseries, Lancashire, amid other acquisitions.
2002: Busy Bees buys the Kindercare group of ten nurseries.
December 2006: ABC buys Busy Bees nurseries and childcare voucherbusiness for 71m.
August 2007: Busy Bees buys Leapfrog Day Nurseries for 31.2m tobecome the UK's largest private nursery group.