Key things to consider when growing your day nursery business via acquisitions
In this article, Courteney Donaldson, Managing Director – Childcare & Education at Christie & Co, shares a list of top things to consider if you’re planning to grow your day nursery business by acquiring another setting, or further expanding your nursery business.
Are you a day nursery owner looking to expand your business by buying another nursery? Whether you’re planning to buy one additional nursery or develop a small group of two, three, four or more settings, preparation is paramount.
Numerous benefits can come with having a group of nurseries, whether it is a small or larger group. Having a number of high-quality settings in the right locations can potentially award economies of scale and provide scope to aid operational efficiencies, staff recruitment and retention, and, with more settings, there is also potential to offer more career development pathways to employees.
When thinking about expansion and growth, it’s important to understand the market you’re growing into; the landscape of the market and what other buyers are looking for. Having those insights will aid understanding of how the market may be shifting and where there are opportunities, allow you to ‘look through the eyes of a buyer’ and gain a better understanding of whether your existing nursery, or a nursery you might buy, will be what other buyers are looking for.
While supply, demand, local macro and micro factors, teamed with operational performance and earnings, all play their part, looking ahead in striving to understand how that market too may change and evolve is of the utmost importance.
Last year, we saw increasing interest from owners of three or more settings who were keen to expand and grow via acquisitions. Indeed, 19% of nurseries sold last year by Christie & Co were purchased by groups of this nature and gained interest from first-time buyers, single setting owners, and national groups. That trend has continued into 2025. The first few months of the year saw more buyers looking to acquire additional nursery businesses, leading to an increased number of viewings conducted and a rise in the volume of offers – there’s much competition, so if you want to grow and expand your business you must distinguish what your unique selling points as a buyers are; what’s going to set you apart from the pool of other eager purchasers?
There has also been a significant increase in the ‘quality’ of nursery businesses being put on the market, which, in 2024, resulted in a 7.7% increase in the average price achieved for day nurseries. This trend has also continued in 2025, in part due to longer-established businesses coming to the market for sale due to Business Asset Disposal Relief tax changes and wider legislative changes. We’re also increasingly seeing more owners exploring their exit options ahead of the Autumn Budget, in anticipation of further changes that may come.
Here are some other things to think about:
- Why do you want to grow, and what is your timeline? There are lots of reasons why you may want to grow your business. It’s important to be realistic about how long an acquisition process may take; for example, share purchases are often quicker than asset and goodwill purchases.
- Do you have acquisition funding in place? If so, how much and on what terms? Banks very much favour the day nursery sector, and favourable terms are available – it’s always worth shopping around to get the best business mortgage terms. An experienced broker won’t just aid you with the funding; they’ll support you through the entire lending process and your acquisition.
- What is your budget? What you can afford will largely be determined by the size of your cash deposit and, if you’re using financing, what you can afford to borrow. Also, consider how much capital you may need to set aside for any decorating or wider refurbishments once you get the keys.
- Finances & funding – If you require finance for the acquisition, speak to a specialist finance broker like Christie Finance, who understands the nuances of the sector. Lenders will want to know whether you have sufficient cash/equity to expand and if you have the operational capacity to successfully manage a new day nursery. They will also require insight into your existing setting(s) and know their current value, trading and debt levels.
- What kind of business are you looking to acquire and in what type of location? Are you looking for a freehold or a leasehold setting? What capacity would be your preference, and in what type of geography and neighbouring environment – suburban, city or within an office park? What do childcare sufficiency audits reveal, and can you access and seek support in reviewing demographic data reports for the location you’re exploring? Think about the location of the new setting and what you require. It may need to be relatively close to your existing setting, as a larger distance can create additional challenges, particularly when it comes to staff holidays and sickness.
- How many settings do you want to grow by? Do you want to grow via a single setting acquisition, or are you looking to acquire an already-established group?
- Who will manage the setting/s? Will this setting or group be operated under management, or will you run it/them yourself? If you already manage your existing business, you may need to think about bringing in management to ensure exemplary standards are maintained across multiple settings.
Once you have worked out what you want to acquire, it’s time to consult with professional advisers and get the process started. It’s essential to speak with a specialist agent, accountant, tax adviser, and solicitor who truly understands the nuances of the day nursery market, as they will help you in overcoming any potential hurdles in your acquisition with their expertise, enabling the process to be as smooth as possible.
If you’re considering expanding your day nursery portfolio and would like a confidential discussion about your options, get in touch with Courteney: [email protected] / +44 7831 099 985
- Business
