UK - Phoenix sells Acorn Care & Education to Ontario Teachers

The consideration for the transaction has not been disclosed, however reports suggest the sale was in the region of £150m, generating an almost 4x return for Phoenix. The deal is said to be financed in equal share by equity from Teachers and by debt from banks led by Lloyds, Barclays and GE.

Ontario Teachers, the Canadian institutional investor, is said to have beat off competition from up to 20 rival bidders in the sale process run by Rothschild. The move is understood to be a part of the LP's plan to change its focus to direct investing, as more and more investors shy away from private equity funds. The deal represents the first European buyout by Teachers' Private Capital, the Canadian pension fund's direct investment arm.

Bolton-based Acorn operates 10 schools and is one of the UK's biggest foster home networks. Phoenix backed the £28m buy-in of the company in 2005, with Allied Irish Bank providing debt to support the transaction. Since the investment in 2005, Phoenix has helped Acorn make 13 acquisitions.

Phoenix is currently hoping to raise £375m for its latest fund. It has been reported that Ontario Teachers, Phoenix's largest investor in its two previous funds, has not yet decided whether to re-committ to its third vehicle.

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• UK / Ireland