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S8 founder and former chief executive of the now defunct MFS Chris Scott, was today appointed to lead Gold Coast-based listed childcare company Early Learning Services (ELS) following a $40 million merger with Payce Childcare.
Shareholders overwhelmingly backed the move that will gear the company toward becoming the largest for profit childcare operation in Australia – a space once dominated by the failed ABC Learning Centres.
ELS will issue the Payce partners 64 million in shares as part of the capital structure.
The company is expected to triple its value and boost marketshare with more than 5000 childcare places across 98 childcare centres.
The appointment of Scott has been hailed a positive move by the company’s chief financial officer Chris Sacre, who was acting CEO until today.
“Chris brings excellent capital market support to the company and shareholder reactions have been positive. It’s a great outcome for the group and it gives us some capacity to grow,” says Sacre.
ELS delivered a $146,000 loss for the 12 months until the end of December – a solid result compared to a $12.3 million loss in 2008.
“We have had our fair of rough times, but now we’re moving forward really positive,” says Sacre.
“We’re in another baby boom and childcare is not just an essential part of the economy, but also a part of life. More mums and dads are going back to work and putting their kids into childcare.”
The company will maintain a bullish acquisition drive over the next 12 months primarily targeting businesses that own between 20-30 centres.
Scott’s former advisor, Octaviar cohort and Wellington Capital boss Jenny Hutson has also joined the ELS board as chairman alongside Brian Ballison who is a director.
Payce Consolidated formerly operated its childcare business in a joint venture with the now collapsed Babcock & Brown.
For the record, there were 12,427,132 for and 56,130 against the merger.
ELS’ (ASX code ELY) shares rose 25 per cent yesterday to 45c in anticipation of the merger and remained unchanged today.
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