Onex and Waterland mull Partou exit

Partou, which operates more than 700 settings, could be marketed based on an annual EBITDA of EUR 70m-80m, three of the sources said. The current figure is "significantly lower", according to a sixth source familiar.

Sell-side pitches are likely to be taken in the coming months, followed by an auction that is pencilled in for H2 2022, two of the sources said. Onex and Waterland are expected to await the outcome of the Dutch elections before pressing ahead with an exit, as a change of government could impact Partou's long-term profitability if state-imposed fee levels were to be altered, one of them added. A new government, comprising a coalition of the same parties that have been in power since 2017, will reportedly be installed imminently.

Ares is an incumbent lender, having financed Onex's 2018 takeover of Netherlands-based childcare provider KidsFoundation, which was valued at around 10x EBITDA of EUR 30m, as reported.

KidsFoundation last year merged with Partou to form the Netherlands' largest childcare provider. Waterland took a stake in the combined entity for an undisclosed sum, buying out Partou's former sponsor Navitas Capital to become a co-owner alongside Onex.

Prior to its tie-up with Partou, KidsFoundation was declared bankrupt in 2014, when it was owned by Providence Equity Partners. Then the largest childcare chain in the Netherlands, with more than 380 centres, KidsFoundation, known as Estro at the time, blamed the economic crisis, job losses among parents and government spending cuts for its collapse, as reported.

"People don't forget about this," one of the sources said. "Sponsors and trade are likely to price in any regulatory risk in an offer, meaning a discount on its valuation." Nevertheless, Partou is likely to sell for at least 10x EBITDA, and could achieve a mid-to-high-teens multiple if the Dutch regulatory environment remains favourable, this source added.

Partou is likely to garner the attention of private equity sponsors and strategics, two of the sources said. French childcare groups including Babilou – which owns the Bloss group in the Netherlands – and Grandir could look, one of them added.

Partou entered the UK market last June via its acquisition of Just Childcare, one of the UK's largest private nursery operators. Just Childcare, which was purchased for an undisclosed sum from Phoenix Equity Partners, operates more than 65 settings.

Founded in 1984, Partou now caters to some 63,000 children across its 700 sites, according to a press release.

Waterland, Partou and Onex – which last month acquired large-cap education company Tes Global – did not respond to requests for comment.

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