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Nursery group poised to buy 12th largest chain

<P>The nursery group Creative Education, which trades under the brand name Primary Steps, is set to clinch a deal to buy Academy Childcare, one of the largest nursery chains in the UK.</P>
The nursery group Creative Education, which trades under the brand name Primary Steps, is set to clinch a deal to buy Academy Childcare, one of the largest nursery chains in the UK.

As Nursery World went to press, David Alexander, chief executive of Creative Education, confirmed that shareholders were due to vote on the issue at the company's Extraordinary General Meeting on 29 December.

Mr Alexander said, 'We'll be hoping to make further announcements very soon. We have quite a firm plan of acquisitions and openings in early January.' Creative Education already owns a 29.2 per cent stake in Academy and is attempting to buy the remaining 70.8 per cent of Academy shares for 1.55m.

To do this it will issue just under 31 million new Creative Education shares at five pence per share and offer a cash option to Academy shareholders who want it.

Creative Education is also hoping to raise 5m (before expenses) by offering 100 million new ordinary shares with institutional and other investors at five pence per share.

In a statement, Creative Education's directors said they were also 'negotiating terms to acquire two childcare companies with 13 nurseries between them'.

The directors said that Creative Education also intends to open new nurseries, but that not more than 25 per cent of additional new or acquired nurseries would be new-build.

If the deal to buy Academy Childcare goes ahead, Primary Steps will rank as one of the top ten largest nursery chains in terms of number of places.

In the November 2004 issue of Nursery Chains, published by Nursery World, Academy Childcare was the 12th largest nursery group, with 1,094 places and 13 settings in England, while Primary Steps had 11 nurseries in London and the south-east plus a pre-preparatory school in Ilford.

Creative Education has expanded its nursery business rapidly since it was set up in 2000. Acquiring Academy would take the group closer to achieving its target of 50 nurseries by the end of this year.

Academy Childcare's nurseries include a 116-place nursery and 104-place shoppers' nursery and creche at the Bluewater shopping centre in Kent.

The group also has eight nurseries attached to Next Generation health and fitness clubs and an arrangement with Next Generation to have first refusal to set up nurseries at any of its new clubs in England and Wales.

Two more nurseries for the health and fitness club chain are in the pipeline - a 40-place nursery due to open at Gidea Park at the end of March, and another in Leicester opening later this year.

Academy Childcare chief executive Mel Brooks said, 'The independent directors of Academy Childcare have recommended acceptance of the offer to the shareholders.'

He said that Academy had been looking to merge with another company or find a buyer for some time and had been working closely with Creative Education for several months.

Creative Education announced also that it has bought three of the four nurseries owned by Happy House Educational Care.

Primary Steps has so far acquired nurseries in Crow- thorne, Reading and Basingstoke and is in the process of buying a fourth near Reading.

Creative Education plc became the first nursery group to float on the stock market in April 2003, when it started trading on the Alternative Investment Market, the London Stock Exchange for smaller, growing companies.