Aussie B Corp childcare provider Leor is set to be acquired by G8 Education, for a total of $9.5 million, as the COVID-19 pandemic drives demand for flexible, tailored childcare options.
G8 will pay an initial $2 million for the business upfront, with an additional $7.5 million contingent of earning targets being achieved between 2022 and 2024.
Leor will operate as a specialist care division within G8, with founder and managing director Andrea Christie-David continuing to lead the business, and keeping her entire existing team on board.
Speaking to SmartCompany, Christie-David explains that she was never actively looking for an acquisition opportunity.
Rather, G8 was looking to diversify its own offerings, and had noticed the work Leor was doing in the specialist childcare sector.
At the same time, Christie-David and her team have been struggling to keep up with rapidly increasing demand.
The business has been around for about three years, and has always had plenty of demand.
But, particularly over the past 18 months, Leor has supported more and more families with complex needs, she says. It has also become an NDIS supplier, which has only ramped that up further.
Leor has also seen a particular spike in demand during the COVID-19 pandemic, Christie-David notes.
Partly, that’s simply related to timing — the business has started to deliver strong outcomes, and word of mouth has contributed to growth, she notes.
But, the crisis has also changed attitudes towards working from home and flexibility for parents, as well as children.
More parents are looking to use daycare or preschool on some days, and in-home care on other days. It means kids can still socialise and meet with other kids, but parents are free from pick-up and drop-off duties occasionally, too.
“Families are looking for flexibility and being able to match different options,” she explains.
The “perfect opportunity” for growth
For Christie-David, an acquisition was a way to meet that demand and grow the business more quickly, allowing her to reach more families and ultimately create more impact, she says.
“One of the things that I’m really passionate about is supporting families whose needs can’t be met with mainstream services, or where their needs are so unique you really need a tailored service,” she explains.
“That’s what this enables us to do — provide more support to families across the country, and in more unique ways more flexible ways at times that suit them, in their own homes.”
G8’s scale, and the size of its own staff, also means there will be more resources for Leor to tap into to better deliver its services.
“This became just a really perfect opportunity.”
Christie-David also says she is “definitely” pleased with the valuation of the business.
It’s representative of the work the business has been doing to date, she says, and what it has the potential to achieve in the future, too.
And, as she takes her business into the next phase of its life, she says she doesn’t necessarily feel any sadness to let go of ownership.
She’s not losing anything, she says. Rather, she’s watching her business grow up.
“I’m still going to be running it,” she points out.
“Now I get to achieve the growth and the impact that I always wanted to achieve, but was limited … it’s not changing, it’s just going to grow.”