Australian regulator queries PE-backed childcare merger

The Australian Competition and Consumer Commission (ACCC) – which disclosed the proposed merger in a review notice in June – will not make a final decision on the transaction until October. However, it has noted that the loss of competition between the country’s two largest before and after school care providers could result in higher prices and lower service standards.

“The ACCC’s preliminary view is that the competitive threat of expansion by smaller players, or potential new entry into the industry, will not be sufficient to prevent the exercise of market power by the combined Camp Australia-JAG after the acquisition,” Rod Sims, chairman of the regulator, said in a statement.

Camp Australia started out in 1987 as a provider of after-school sports coaching. After-school care programs were introduced seven years later and the company now operates approximately 780 sites nationwide. Bain Capital Private Equity announced its acquisition of the business in December of last year, having reportedly overcome competition from the likes of KKR.

JAG is one of the only two other outside school hours care businesses with national scale. It operates in about 380 schools under the OSHClub and Helping Hands Network brands. When Advent Partners bought JAG in 2015 it said it would pursue bolt-on opportunities in states where the company was underrepresented.

The ACCC’s primary concerns relate to operations of the two companies in Victoria, Western Australia, New South Wales, and Queensland where there is the greatest overlap. The regulator added that the merger may also harm the interests of primary schools that rely on competition between Camp Australia and JAG to obtain the best possible deal for use of their facilities.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Australasia
• Buyouts
• Regulation
• Australia
• Education
• M&A
• Bain Capital Asia
• Advent Partners