The Busy Bees nursery group intends to double in size in the UK by buying up other nursery businesses following its acquisition last month by Knowledge Universe, a US education firm based in Singapore.

Knowledge Universe bought the Lichfield-based company, which has 131 settings, for an undisclosed sum. The sale came seven months after Busy Bees’ former owner, ABC Learning Centres, went into administration and receivership in Australia. Knowledge Universe is also believed to be about to buy ABC’s 127 nurseries in New Zealand.

Knowledge Universe is a global education company that works with children from toddlers to primary and secondary school students. It has 42,000 staff at more than 3,000 schools, colleges and day nurseries around the world.

The purchase of Busy Bees, following the acquisition of Teddies nurseries to Bright Horizons Family Solutions, means that the top two nursery groups in the UK are American owned.

In an exclusive interview with Child Carer, John Woodward, Managing Director of Busy Bees, said the company had plans to expand now that it was under new ownership. “We are the largest nursery group in the UK because we provide more childcare places than anybody else. What we want to do is double that over a period of time,” he said.

Busy Bees was founded in 1983 by three families who were involved in care and education. Their first nursery opened in 1984 and now the nursery group has 11,500 childcare places and out-of-school facilities for children up to the age of 12.

But Mr Woodward would not set a time limit on when the company would double in size and capacity. “Whenever it is appropriate to do it, we will,” he said.
The management team at Busy Bees will carry on in their roles at the company and are “significant shareholders” of the business, Mr Woodward added.
Busy Bees demonstrated its business acumen and the importance of timing when it bought Leapfrog nurseries and its childcare voucher business from Nord Anglia for £31.2m in August 2007 – just over three years after Nord Anglia had paid £60 million for the nursery group.

“When Leapfrog was for sale for £60-odd million, we didn’t buy it. The day it was available for £30-odd million we bought it because we could judge the business,” Mr Woodward said.
“There are distressed large companies about in the sector. We would like to incorporate some of those into our business; but not at a daft price. We’re going to do it sensibly.”

In December 2006 the Busy Bees nursery group and its childcare voucher company was bought by ABC Learning Centres for £71 million from UK-based private equity firm Gresham. But by early 2008 ABC had run into severe financial difficulties back in Australia that led to the company going into receivership last November.

“We were never in receivership, but ABC were,” Mr Woodward said. “Although we were profitable and not in receivership we had the problem that the parent company was. That made it difficult to move forward.”

Last September ABC sold the Busy Bees childcare voucher company to Computerserve for £90m. There was speculation at the time that a management buyout of Busy Bees might have been on the cards, a notion he rejects.

“If we had gone for a management buyout we wouldn’t have had robust backing, so we couldn’t have done some of the things that we want to do in the future.”
Busy Bees will be working with Michael Milken, chairman and co-founder of Knowledge Universe. Milken’s career on Wall Street is said to have inspired the ruthless and greed corporate raider Gordon Gekko, whose belief that “Greed is good” in Oliver Stone’s 1987 film ‘Wall Street’ encapsulated up the mood of the time.

Nicknamed “the Junk Bond King’, Milken pleaded guilty to six securities and reporting violations and was sentenced to 10 years in jail, but was released after 22 months.

Over the past three decades Mr Milken has devoted much of his time and money to charity. In 2007 Forbes said his estimated net worth was $2.1 billion and that he was the 458th richest person in the world.
Mr Woodward said of him, “I think he has a very good view of the sector. He will be a very good partner for us.

“We’ve always been committed to providing real quality. Without a doubt he’s got the same view.”