Acquisitions in childcare
Johan Bosters from Bergen op Zoom put his company up for sale in 2021. “Since 2000, I have been active as an entrepreneur in childcare. In that time, I’ve seen and experienced quite a lot: enormous growth and business success – at one point, I managed 26 childcare locations in the West Brabant region – but also a bankruptcy and several economic crises. After more than 20 years, it felt like a natural moment for me to sell the company. The timing is favorable; there are currently many buyers active who are willing to pay a good price. But the phase of life I’m in as an early fifty-something also played a role. I still enjoy building an organization, but I no longer wanted to handle the daily operational management.”
The acquisition process, involving the sale of the two childcare centers managed by Bosters — Le Garage in Bergen op Zoom and De Blokkentrein in Roosendaal — to the German company Stepkids, was guided by David Linders and Kiki Jacobs from Rembrandt M&A. The (partly subsidized) childcare market is attractive to many investors, says Linders. “Especially in economically uncertain times, childcare centers offer a stable revenue stream with relatively low risk.”
After more than 20 years, it felt like a natural moment for me to sell the company.
Attractive market
“All major players in the sector are now owned by investment firms, and many transactions are still taking place,” says Linders. There are still quite a few prejudices about investment firms, he notes. “The dominant image remains that of an investor who immediately starts cutting costs. In reality, this is often not the case—on the contrary. There are many companies—like Stepkids—that simply want to expand their footprint in a certain region or abroad and are looking for great businesses to help realize that growth ambition.”
Continuity
Bosters was determined to sell his company to a party that would ensure continuity for the sixty employees. After a valuation and the preparation of an information memorandum, several interested buyers contacted Rembrandt. After an initial round of discussions, three potential candidates remained, Bosters explains. “The bids from these three parties were within the same range. This made the personal connection and the ‘soft’ terms of the transaction even more important.
With the people from Stepkids, I immediately had a good feeling in that regard; they guaranteed that the current organization would remain as intact as possible. After all, you’re essentially selling your employees too, and you want to take good care of them. They also saw a role for me personally in the future. On behalf of Plek voor Kinderen, the Dutch subsidiary of Stepkids, I am currently working as Director of Business Development to further expand the company in the Netherlands. In short, I no longer have the pressure of daily operational management, and that suits me very well.”
Start early
The sale of Bosters’ company is a good example of how an acquisition in the childcare sector can play out, explains Kiki Jacobs. “Make sure you start thinking about the future of your business early and begin preparing it for sale in time.” According to Kiki, this includes important issues like succession planning. “What type of buyer do you want to sell your company to? And to what extent do you want to remain involved in the business after the sale? These are important questions to consider well in advance.”
Financial matters
It’s best to have various financial, fiscal, and legal issues in order before entering into an acquisition process. For example, consider the amount of the management fee and improve your working capital, such as by adjusting standard payment terms. These kinds of measures make you more attractive to potential buyers.
Also, think about the most suitable fiscal structure and ensure all your figures are accurate and up to date.” It can also be beneficial to have an external acquisition specialist review your company through a so-called vendor due diligence investigation, adds Linders. “An external party looks at your business through the eyes of a potential buyer and is much better at spotting any blind spots. This can save you a lot of trouble when a potential buyer starts asking difficult questions.”
An external party is much better at identifying any potential blind spots.
Personal connection
Bosters looks back on a successful acquisition process, although he noticed that the real work only began after the initial negotiation phase. “During the due diligence, numerous additional questions and adjustments often arise, which frequently lead to a revision of the offer. That happened in our case as well. At that moment, it’s good to have your affairs as much in order as possible and to have an advisor by your side who will go to great lengths for you. In this, Rembrandt met all expectations.”
The personal connection is also extremely important here. “During a sales process, as an entrepreneur, you usually work intensively with an acquisition advisor for at least six months. So, above all, find an advisor who not only has expertise but also gives you a good feeling. Because in the end, you do it together. And don’t forget: you only get one chance to sell your company successfully.”