Early Childhood Education Programs with Real Properties
Industry
Business Broker
Situation
The owner founded this childcare center in the 1990’s and owned multiple childcare centers. Her retired husband wanted her to start slowing down so she looked to sell this location in Natick, MA, which included two adjoining real estate properties. A corporate attorney referred her to work with BayState Business Brokers’ Molly Hanson who successfully brokered the sale.
BayState Business Brokers’ Approach
Business Broker Molly Hanson has vast experience in selling childcare centers. As she reviewed the center’s financials and prepared to bring the business to market, she sought to attract well-capitalized strategic buyers already operating in the Commonwealth of Massachusetts given state licensing requirements.
Hanson selected an auction process to generate interest in the early learning centers with their beautiful properties. Once letters of interest were submitted, she coordinated a facility tour for select prospective buyers with all but one tour participant then submitting a letter of intent (LOI).
At this point in the process, Hanson guided the seller on evaluating the prospective buyers and the seller interviewed the top prospects. A prospective buyer was chosen and the due diligence process commenced.
Business broker Molly Hanson spearheaded the sales process working closely with two key employees who knew the business was being sold and were essential to organizing and presenting the financials and other key business metrics. The owner was not involved in the day-to-day operations of the business, so the office manager and bookkeeper were hands on in preparing and supporting the quality of earnings analysis.
During regularly scheduled virtual meetings with the buyers, defined subject matters were discussed to keep the meetings focused on various aspects of the business including enrollment, staffing, operations and technology. The owner and her team were exceptionally organized which enabled productive meetings for the buyers to complete the due diligence process. In close coordination with the seller’s corporate and real estate counsel, the purchase and sale agreement was negotiated and strategies to coordinate the close of the real estate properties and the childcare center were defined in anticipation of the state license being issued.
The buyers were strategic buyers operating childcare centers internationally and in the United States including Massachusetts, with the parent company in Canada. Closing the transaction of both real estate properties and the childcare center involved many professionals including multiple real estate attorneys, business attorneys for both parties, advisors from the buyer’s parent company and Molly Hanson, as business broker, quarterbacking the team.
As preparation for close was nearing, Hanson learned that the strategy for transfer of the childcare licensing through the Department of Early Education and Care (EEC) was changing such that policies and past practices were no longer feasible in finalizing a timely issuance of the license. Hanson pivoted and the broader team coordinated efforts to select a closing date after the green light from the EEC.
Results
The sale of the childcare centers in Natick, MA is the first major step for the seller to start to meet her goals of spending more time with her children and grandchildren and continuing involvement with her other childcare programs while slowly transitioning toward retirement. The buyers expanded their portfolio of childcare centers with a campus that presented great opportunity for growth and financial upside.
