Partners Group’s Guardian Early Learning may return to market

The sale of both Affinity Education and Guardian Early Learning were shelved last year, with challenging market conditions making it tough to meet price expectations.

Quadrant Private Equity is not expected to bring its Affinity Education childcare business back to the market for some time, but some believe that may not be the case with Guardian Early Learning, owned by Partners Group.

The sale of both Affinity Education and Guardian Early Learning were shelved last year, with challenging market conditions making it tough to meet price expectations.

However, some believe Guardian Early Learning’s private equity owner may not have given up just yet.

There’s talk that a couple of parties may still be around the hoop and the business could be coming back to market.

It is understood that the private equity firm Affinity Equity looked at the business but walked away, while Carlyle was looking before.

Carlyle recently recapitalised its Accolade Wines business and is no longer an owner, and held early talks about a possible acquisition of Craveable Brands.

However, the understanding is that the discussions have not progressed further for Craveable Brands, the owner of Oporto Chicken, Chicken Treat and Red Rooster.

While private equity firms are no longer thought to be part of the conversation, US-based childcare operator Bright Horizons could be interested.

Bright Horizons purchased Only About Children for $450m from Bain Capital in 2023.

Last year, there was talk that Partners Group wanted 12 times Guardian Early Learning’s earnings before interest, tax, depreciation and amortisation.

Guardian was believed to be generating between $80m and $100m of annual earnings before interest, tax, depreciation and amortisation.

Partners purchased Guardian from Navis in 2016 for $440m, including debt.

Guardian is the third-largest provider of childcare in Australia, behind Goodstart Early Learning and G8 Education.

The business was among a number shown to buyers last year before being withdrawn.

Silver Lake tried to sell Ticketek owner TEG, attracting offers around $2bn from players like Blackstone and Kohlberg Kravis Roberts, but it was hoping for $2.5bn.

It’s since refinanced the business, so the thinking is that it could be some time before it returns to the market.

More generally, when it comes to private equity deals, the understanding is that a number of firms are preparing to hire advisers for companies they want to divest, but this is mostly to run a sale process from the second quarter of the year onwards, once a clearer picture of the economic outlook emerges.

Most need some more time to prove they can increase earnings in the years ahead, and will be working hard this year to drive down costs and ensure their operations are performing well in the softer economic environment.

Yet from a debt perspective, it is thought that the market is more favourable, with potential interest rate cuts in the US helping buyers to obtain affordable funding.