Field narrows for $700m Affinity Education sale

The owners of Affinity Education, Anchorage Capital Partners, have narrowed down the buying field for its business to six parties.

Still within the mix are one local and two offshore childcare providers, with the remainder being private equity.

It is unclear whether the listed rival G8 remains in the competition. G8 is the second-largest childcare provider in Australia behind Goodstart, which emerged out of the ABC Learning business, while Affinity is the third-largest operator.

Luminis Partners is running the contest to sell Affinity that some say could be worth about $700 million. Parties thought to have taken a look earlier in the process are Bain Capital, which owns the childcare business Only About Children, Partners Group and potentially Kohlberg Kravis Roberts.

Affinity, based in Brisbane, owns at least 150 centres throughout Australia.

Its sale comes as speculation mounts that Wesfarmers is likely to reap a healthy profit from the sale of its Kmart Tyre and Auto business. The understanding is that the sale price being offered by at least one suitor is more than 10 times its earnings before interest, tax, depreciation and amortisation of $30 million.

It leaves some betting that the Perth-based conglomerate will likely reap somewhere between $350m and $400m from the operation.

Among those left in the process, run by advisory firm Record Point, is thought to be tyre company Goodyear and Continental Tyres, while Bapcor is no longer in the race.