Epiris reaps 6.5x on Treetops sale to Busy Bees

Kenny Wastell
30 March 2017

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Epiris has agreed to sell UK nursery school business Treetops Nurseries to trade buyer Busy Bees, generating proceeds of ТЃ93m.

The transaction has generated a money multiple of 6.5x and an IRR of 59% for Epiris. It also represents a 91% increase on Treetops' NAV of 107 pence per share in September 2016, according to a statement issued by the vendor.

Under the GP's tenure, the business has undertaken an acquisitive growth strategy, increasing its number of locations from 31 to 61. Funding was also used to redevelop sites added through bolt-on acquisitions.

Epiris also introduced Aspirations Care Group chair Stephen Booty as Treetops chairperson and former SLC Group CEO Charles Eggleston as its CEO.

The exit is the latest in a series of divestments by Epiris, as it approaches the end of its 12-month notice period as investment portfolio manager of listed LP Electra Private Equity. It comes shortly after the sale of its remaining stake in Allflex Corporation to an undisclosed existing shareholder for £70.3m.

The sale of Treetops is expected to complete in April 2017.

Previous funding
Epiris (then known as Electra Partners) invested an undisclosed amount in Treetops' first round of funding in 2012, when the company span out from the Pine Unit Trust.

In April 2014, the GP provided follow-on funding believed to total less than £10m to support the bolt-on of a nursery school company based in the south-east of England.

Company
Headquartered in Derby and established in 1991, Treetops is a provider of nursery care for children aged one and over. It cares for around 6,000 children and has a headcount of 1,300, with locations in the north of England, the Midlands and the south-east.

The company generated a turnover of £30.1m in the year ending September 2016, according to publicly available documents, with operating profit of £4.6m.

People
Epiris – Chris Hanna (partner); Nicola Gray (investment manager).

Advisers
Vendor – PwC (corporate finance); Eversheds (legal).