The group of three nurseries is the largest private childcare provider in Fife, with 177 childcare places at sites based at St Andrews, Glenrothes and Dalgety Bay.
Craig (pictured) and Ian Skinner fought off bids from two large Scottish nursery groups to acquire the business, which employs 77 people.
The freehold nurseries were also run as a family business before and Craig Skinner said he believed that the previous owner had been keen to keep them operating along similar lines.
The managers at all three of the nurseries have been in place for more than ten years and the settings have good reports from Scotland's Care Commission.
Working together is not new for the brothers, who previously helped run their family's pharmacy and post office business in Cumbernauld, near Glasgow.
'Ian is a pharmacist. My dad started with ice cream vans, then a newsagent's, then the pharmacy and the post office,' said Craig Skinner. He said that after their parents died, 'we spent a year and a half trying to pluck up the courage to sell the family business. We wanted to do something that both of us had an interest in.'
Both brothers have families, and Mr Skinner said their only relevant experience came from finding childcare when their own children were younger.
'We don't have the experience (of running a nursery) at the moment, so we decided to go for a business that already had good management in place, with a good reputation. Rainbow has had fives and sixes in its inspection reports. These are nurseries that are very well-run, and the staff are excellent. The nurseries are all doing very well and are extremely popular in Fife.
'In the short term, we want to try to learn as much as we can. We've put almost everything we have into the business and we really want it to work.
'In three to five years we'd like to build our own nursery from scratch,' he added.
The nurseries are in 'quite affluent areas' and about half an hour's commuting distance from Edinburgh. The brothers had considered city centre nurseries, but what appealed to them about Rainbow were the large outdoor areas.
'We specifically wanted nurseries where children could come in and out whenever they pleased,' Mr Skinner said.
Martin Daw, associate director at Christie & Co, said, 'Rainbow Nurseries attracted significant interest from existing operators, including regional and corporate groups.
'This deal highlights that the banks are still willing to lend in this sector, and to first-time buyers, which again highlights their continuing confidence in the sector.'
