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The children's nursery vouchers business of Busy Bees, which is used by up to 100,000 British parents, has been put up for sale by its stricken Australian parent company.
ABC Learning, the owner of Britain's biggest childcare provider, appointed Rothschild yesterday to manage the sale of the leading business in the sector, which has a turnover of about £220 million.
The announcement confirms that the UK childcare centres will continue to operate as usual while the company moves to complete a tender process for the vouchers business in the first half of next year.
The development came as ABC, the world's biggest publicly traded childcare provider, agreed to sell 60 per cent of its US business to the private equity unit of Morgan Stanley for A$750 million.
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"What we have achieved, I believe, is a substantial derisking of our balance sheet," Eddie Groves, chief executive, said. "We've realised significant value for our US business; we've retained a material ongoing presence in this important market and we've substantially strengthened our capital structure."
ABC runs more than 120 nurseries in Britain after acquiring Busy Bees for £70 million in December 2006 and Leapfrog Nurseries for £31.2 million last August. The purchases were part of a A$1.1 billion international expansion that almost doubled net debt in the year ended December 31 to A$1.7 billion.
The company has previously flagged the sale of Leapfrog nursery properties, which it expected to reap A$250 million between January and April this year.
John Woodward, managing director and a founder of Busy Bees Group, said that the vouchers business was "not core" to ABC's strategy. The comments come just a week after ABC highlighted that it would "continue to drive voucher revenue growth".
Busy Bees' voucher business, which has a market share of 35 per cent, claims to have grown 60 per cent in terms of the participating number of companies and parents in the year to June 2007. The four other leading operators in the UK are Sodexho, Accor and Care4.
Childcare vouchers, which were re-introduced in 2005, make the first 55 pounds of parents' weekly childcare costs National Insurance and tax-free.
Employers save on their own NI contributions but are typically charged 4 per cent of the face value of the voucher as a management fee.
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- reprinted from the Times