PE investors abandon Australia childcare merger

The move comes after the Australian Competition and Consumer Commission (ACCC) expressed concerns 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The ACCC, which announced the companies had withdrawn their request for merger clearance, began an informal review in June. It wasn’t due to make a final decision on the transaction until October, but expressed a preliminary view that expansion by smaller players or new entrants to the industry “will not be sufficient to prevent the exercise of market power by the combined Camp Australia-JAG after the acquisition.”

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 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 bought JAG in 2015 it said it would pursue bolt-on opportunities in states where the company was underrepresented.

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