The move has increased Nord Anglia's provision to 73 day nurseries, making it the second-largest nursery operator in the UK after Asquith Court, which has 117 settings. Leapfrog was the third-largest nursery chain in the UK in the winter 2003 edition of Nursery World's sister publication Nursery Chains, with 4,199 places, while Nord Anglia was eighth with 2,832 places.
Derek Mapp, Leapfrog's executive chairman, denied that the buy-out had been prompted by financial difficulties and said the rationale behind the move was to give both groups 'firepower' to acquire more nurseries. He added, 'Both of us realise the opportunity for the sector is through consolidation. It's an opportunity for us to establish a strong chain of nurseries instead of us bidding against each other.'
Mr Mapp, who will be managing the integration of Leapfrog, said its management team had been 'retained in its entirety'.
Kevin McNeany, Nord Anglia's chairman, said the acquisition would 'establish Nord Anglia as a market leader in the fast-growing nursery sector'. He added, 'Leapfrog is a business with a proven track record and a strong management team and we believe that the combination of the two businesses will bring significant advantages to the enlarged group.'
John Woodward, director of Busy Bees, the fourth largest nursery group, said the merger demonstrated how much the sector had changed in the past five years. 'Nord Anglia obviously realises there is widening interest in the sector, as do investors. It's a good indication of the city's interest in the market.'
He predicted that in five years' time today's ten largest UK chains would have been reduced to around four big groups through consolidation.
Martin Pace, director of Dolphin Nurseries, said it was the sort of merger he had expected, particularly among nursery groups backed by venture capitalists, such as Leapfrog. He added, 'It's a good message for the sector - 60m is a lot of money to pay.'
Nord Anglia plans to fund the 60m acquisition by a 23m share placing and a bank loan of 39.6m.
The group, announcing its interim financial results for the six months up to 29 February 2004, said its turnover had increased by 10.4 per cent to 45.5m from 41.2m in 2003. Profits were down to 970,000 from 2.1m.
In addition to its nurseries Nord Anglia also runs ten independent schools in the UK, but it said it intends to sell this division. A number of factors, including a drop in pupil numbers, had influenced its decision, the company added.
Nord Anglia received 4.2m from the sale of Hull Grammar School in January and recently announced the closure of Gramercy Hall in Torbay. The group will continue to run operations in ten international schools based overseas. It also out-sources education and training, and is bidding for contracts with the Department for Education and Skills, the Home Office and the Ministry of Defence.
