The move has followed Nord Anglia's acquisition last month of Leapfrog's 39 nurseries in a 60m deal. It means Nord Anglia is now the market leader at 10,262 places, although Asquith Court Schools operates more nurseries.
Nord Anglia replaces Asquith Court as the UK's largest chain, which had remained unchallenged in the top spot since Nursery World first compiled a league table of the largest groups in summer 2001. Jigsaw was previously the UK's sixth largest group, with 36 nurseries and 3,768 places. Nord Anglia is buying 28 Jigsaw nurseries and a Jigsaw spokeswoman said the remaining eight would be sold to other buyers.
In the year up to 31 March 2003 the 28 Jigsaw nurseries bought by Nord Anglia had a turnover of 15.2m and made a small profit before interest and tax of 800,000. The acquisition is subject to Ofsted granting Nord Anglia a license for each Jigsaw nursery it is buying.
Nord Anglia chief executive Andrew Fitzmaurice said the 28 nurseries were chosen according to 'the best fit for us', and that the company had 'taken immediate ownership of 21 of the 28'. He said he expected the remaining seven nurseries to come on board 'by the end of the week' once Ofsted licenses were received.
Nord Anglia recently announced its intention to sell its independent UK schools division and concentrate on developing its nursery business. Mr Fitzmaurice said nurseries had the advantage of being 'a replicable business model', unlike schools, and that best operating methods could be applied to all of them.
Although Jigsaw is only slightly smaller in terms of settings and places than Leapfrog, Nord Anglia bought it for considerably less. In a statement, Nord Anglia said, 'The assets being acquired as part of the Jigsaw acquisition have an immaterial value, largely because Jigsaw's properties are held on a leasehold basis. The directors have valued Jigsaw based upon its revenue and profit streams and the price of the nurseries has been decided on that basis.'
Nord Anglia is funding the Jigsaw acquisition with a 14m loan from its backers, the AIB Group (UK). Kevin McNeany, Nord Anglia chairman, described the move as 'a major step in the implementation of the board's stated strategy of expanding the nursery division'.
Jigsaw, set up in 1991, underwent a management buyout in 1998 when venture capitalists 3i obtained a controlling stake, reportedly for 14m. 3i is believed to have invested a further 20m in the company. Jigsaw has endured financial difficulties in recent years. In the year ending March 2000 it lost 2.9m on a turnover of 8.3m.
In a statement 3i said the sale 'provides further evidence of consolidation in the sector'.
In summer 2001 Jigsaw was number two in Nursery World's first league table of the UK and Ireland's largest chains with 4,104 places and 38 nurseries.
Asquith Court had 5,340 places.
Nord Anglia's acquisition of Leapfrog is due to be completed on 11 June, when shares in the company will go on sale, following the company's Extraordinary General Meeting yesterday (9 June).
Nord Anglia is funding its purchase of Leapfrog with a 23m share placing and a 39.6m bank loan.