Mayfield Childcare looks to expand South Australia presence with acquisition of seven Precious Cargo centres

Mayfield Childcare (ASX: MFD) has entered into an exclusivity agreement and made a $4.8 million conditional offer to acquire seven operating centres in South Australia.

The deal with Precious Cargo Education includes the acquisition of business assets, the brand name and related intellectual property of the early childhood education and care provider.

The agreement also provides Mayfield with immediate management rights over aspects of Precious Cargo’s operations.

Management in place

Mayfield has already commenced management oversight of Precious Cargo’s head office staff and seven operating childcare centres in Blackwood, Collinswood, Lockleys, Marion, St Peters, Westbourne Park and Woodville Park.

The centres have a combined total of 882 approved places.

Mayfield management said the transaction will be funded from existing working capital and/or the company’s acquisition facility, with settlement expected in Q3 2024.

A leading provider of Montessori early education in SA, Precious Cargo has been operating for nearly 20 years but the group entered external administration in June.

Major turnaround

The expansion comes as Mayfield experiences a major turnaround.

Speaking at the company’s AGM in May, chair David Niall said Mayfield is focused on building a culture of integrity, respect and accountability across the company after a period of management change and instability.

“Our vision to build an environment where every child reaches their natural potential has been central to reinvigorating our culture and has given focus to the whole Mayfield community,” he said.

Core themes

Mr Niall said the board is focused on certain core themes in its approach.

“First, we believe that the company needs to grow to achieve an optimal scale of operations as a listed childcare operator.”

“Second, the company needs pathways to enhance the timing and scale of that growth.”

“One of our main pathways to growth lies with the incubator agreement that we have in place.

“The third theme is operational excellence, where we have made some significant advances over the 2023 year.”