HMT is delighted to announce that Ricky Lane has been appointed a Partner with immediate effect. Ricky is a corporate finance specialist with over 15 years’ experience and has been working in our lead advisory team since joining HMT in July 2017.
Ricky trained at Grant Thornton, in the Thames Valley practice, with experience in audit, recovery and reorganisation and transactional due diligence before starting his corporate finance career.
Ricky left Grant Thornton in June 2017 to join HMT as an Associate Director and he was promoted to Director in 2019. Since joining, Ricky has worked on a significant number of sell-side, fund raising and buy-side transactions helping entrepreneurs create and realise value in their own businesses. This includes a significant amount of private equity and debt fund raising either for management teams seeking to undertake an MBO or owner managers looking to both derisk and raise growth capital.
Ricky’s appointment as a partner, working alongside Andrew Thomson, Wendy Hart and Paul Read strengthens our position as a leading corporate finance advisor in the Thames Valley and South-East of England.
Andrew Thomson commented:
“Both on personal and professional level, it has been extremely rewarding to watch Ricky’s career progression since he joined HMT in 2017 culminating with his admission to the partnership. Ricky shares our drive and passion to deliver an optimal outcome for all our clients and should be congratulated for hitting this well-deserved milestone”
Ricky Lane commented:
“I am delighted that Andrew, Paul and Wendy have invited me to become a Partner at HMT. Whilst obviously an important personal milestone, I believe this is a testament to the strength of our team, the trust of our clients, and the firm’s continued strong performance in the corporate finance market.
HMT is delighted to announce that Ricky Lane has been appointed a Partner with immediate effect. Ricky is a corporate finance specialist with over 15 years’ experience and has been working in our lead advisory team since joining HMT in July 2017.
Ricky trained at Grant Thornton, in the Thames Valley practice, with experience in audit, recovery and reorganisation and transactional due diligence before starting his corporate finance career.
Ricky left Grant Thornton in June 2017 to join HMT as an Associate Director and he was promoted to Director in 2019. Since joining, Ricky has worked on a significant number of sell-side, fund raising and buy-side transactions helping entrepreneurs create and realise value in their own businesses. This includes a significant amount of private equity and debt fund raising either for management teams seeking to undertake an MBO or owner managers looking to both derisk and raise growth capital.
Ricky’s appointment as a partner, working alongside Andrew Thomson, Wendy Hart and Paul Read strengthens our position as a leading corporate finance advisor in the Thames Valley and South-East of England.
Andrew Thomson commented:
“Both on personal and professional level, it has been extremely rewarding to watch Ricky’s career progression since he joined HMT in 2017 culminating with his admission to the partnership. Ricky shares our drive and passion to deliver an optimal outcome for all our clients and should be congratulated for hitting this well-deserved milestone”
Ricky Lane commented:
“I am delighted that Andrew, Paul and Wendy have invited me to become a Partner at HMT. Whilst obviously an important personal milestone, I believe this is a testament to the strength of our team, the trust of our clients, and the firm’s continued strong performance in the corporate finance market.
The UK nursery sector has witnessed a surge in M&A activity, predominantly driven by private equity (PE)-backed consolidators seeking to build national-scale operations. With favourable demographic trends and a resilient demand for early years education, nurseries have become an attractive investment opportunity. However, recent government policy changes introduce both risks and opportunities that could shape the future of the sector.
The Rise of Private Equity-Backed Consolidation
Private equity firms have been actively acquiring nurseries across the UK, attracted by the sector’s stable revenue streams, recurring demand, and the potential for operational efficiencies. Fragmentation in the market, with many small, independently owned nurseries, has created an opportunity for PE-backed groups to roll up multiple businesses and benefit from economies of scale. Key consolidators in the space, such as Busy Bees, Bright Horizons, and N Family Club, continue to expand through acquisitions, improving profitability by centralising administrative functions, enhancing digital infrastructure, and standardising curriculum offerings. This M&A trend is expected to persist as PE firms deploy capital in a sector with strong fundamentals.
Government Policy Changes: Risks & Opportunities
Recent policy shifts, particularly around government-funded childcare, present both challenges and growth opportunities for nursery operators. Key changes include:
1. Expansion of Free Childcare Entitlements
The UK government has pledged to expand free childcare entitlements, increasing funding for early years education. While this could drive higher enrolment levels and enhance demand for nursery places, concerns remain around whether government funding will adequately cover the true cost of provision. Underfunding could pressure margins, particularly for smaller operators, potentially making them attractive acquisition targets for larger PE-backed consolidators.
2. Rising Wage Costs and Staffing Challenges
The planned increases in the National Minimum and Living Wage will significantly impact staffing costs, which constitute the largest expense for nursery operators. Private equity-backed firms with greater financial resources may be better positioned to absorb these costs through operational efficiencies, while smaller nurseries could struggle, leading to further consolidation.
3. Regulatory Pressures
The nursery sector is heavily regulated, with stringent Ofsted requirements and staff-to-child ratios. Any tightening of regulations could increase compliance costs, potentially deterring new entrants while favouring larger, well-capitalised groups that can navigate regulatory complexities more effectively.
4. Changing Parental Preferences
Post-pandemic, there has been a shift in parental preferences towards flexible childcare solutions, improved early years education quality, and enhanced digital engagement. Consolidators that can innovate in these areas—such as offering hybrid childcare models or leveraging technology to streamline parent communication—stand to gain a competitive advantage.
Investment Outlook: A Buy-and-Build Opportunity?
Despite the risks, the UK nursery sector remains an attractive investment for PE firms seeking long-term, stable returns. The interplay between government policy and market consolidation will be key to shaping the industry’s future. While funding challenges and wage pressures create headwinds, they may also accelerate the trend of acquisitions, allowing PE-backed operators to scale more rapidly and implement cost efficiencies.
For investors, due diligence is critical in assessing financial sustainability, regulatory compliance, and the impact of government funding changes. Those who can navigate these complexities and leverage the sector’s structural growth trends will be well-positioned to benefit from continued M&A activity.
Conclusion
The UK nursery sector is undergoing a transformation, with private equity playing a central role in reshaping the landscape. While government policy changes introduce risks, they also create opportunities for well-capitalised consolidators to strengthen their market position. As the sector evolves, PE-backed operators with strong strategic execution will be best placed to thrive in this dynamic environment.
At HMT we recently supported the Shareholder of Whitton Day Nursery on his exit to Kindred – another PE backed consolidator. As a result of this and other sector transactions we have a good insight into the value drivers PE funders assess when appraising an acquisition opportunity and what can optimise value for the exiting shareholders. Furthermore, if you are operating a multisite group you might be in a position to release some equity now, and take on a PE partner to further consolidate this fragmented market. If you are contemplating a transaction do please get in touch.
The UK nursery sector has witnessed a surge in M&A activity, predominantly driven by private equity (PE)-backed consolidators seeking to build national-scale operations. With favourable demographic trends and a resilient demand for early years education, nurseries have become an attractive investment opportunity. However, recent government policy changes introduce both risks and opportunities that could shape the future of the sector.
The Rise of Private Equity-Backed Consolidation
Private equity firms have been actively acquiring nurseries across the UK, attracted by the sector’s stable revenue streams, recurring demand, and the potential for operational efficiencies. Fragmentation in the market, with many small, independently owned nurseries, has created an opportunity for PE-backed groups to roll up multiple businesses and benefit from economies of scale. Key consolidators in the space, such as Busy Bees, Bright Horizons, and N Family Club, continue to expand through acquisitions, improving profitability by centralising administrative functions, enhancing digital infrastructure, and standardising curriculum offerings. This M&A trend is expected to persist as PE firms deploy capital in a sector with strong fundamentals.
Government Policy Changes: Risks & Opportunities
Recent policy shifts, particularly around government-funded childcare, present both challenges and growth opportunities for nursery operators. Key changes include:
1. Expansion of Free Childcare Entitlements
The UK government has pledged to expand free childcare entitlements, increasing funding for early years education. While this could drive higher enrolment levels and enhance demand for nursery places, concerns remain around whether government funding will adequately cover the true cost of provision. Underfunding could pressure margins, particularly for smaller operators, potentially making them attractive acquisition targets for larger PE-backed consolidators.
2. Rising Wage Costs and Staffing Challenges
The planned increases in the National Minimum and Living Wage will significantly impact staffing costs, which constitute the largest expense for nursery operators. Private equity-backed firms with greater financial resources may be better positioned to absorb these costs through operational efficiencies, while smaller nurseries could struggle, leading to further consolidation.
3. Regulatory Pressures
The nursery sector is heavily regulated, with stringent Ofsted requirements and staff-to-child ratios. Any tightening of regulations could increase compliance costs, potentially deterring new entrants while favouring larger, well-capitalised groups that can navigate regulatory complexities more effectively.
4. Changing Parental Preferences
Post-pandemic, there has been a shift in parental preferences towards flexible childcare solutions, improved early years education quality, and enhanced digital engagement. Consolidators that can innovate in these areas—such as offering hybrid childcare models or leveraging technology to streamline parent communication—stand to gain a competitive advantage.
Investment Outlook: A Buy-and-Build Opportunity?
Despite the risks, the UK nursery sector remains an attractive investment for PE firms seeking long-term, stable returns. The interplay between government policy and market consolidation will be key to shaping the industry’s future. While funding challenges and wage pressures create headwinds, they may also accelerate the trend of acquisitions, allowing PE-backed operators to scale more rapidly and implement cost efficiencies.
For investors, due diligence is critical in assessing financial sustainability, regulatory compliance, and the impact of government funding changes. Those who can navigate these complexities and leverage the sector’s structural growth trends will be well-positioned to benefit from continued M&A activity.
Conclusion
The UK nursery sector is undergoing a transformation, with private equity playing a central role in reshaping the landscape. While government policy changes introduce risks, they also create opportunities for well-capitalised consolidators to strengthen their market position. As the sector evolves, PE-backed operators with strong strategic execution will be best placed to thrive in this dynamic environment.
At HMT we recently supported the Shareholder of Whitton Day Nursery on his exit to Kindred – another PE backed consolidator. As a result of this and other sector transactions we have a good insight into the value drivers PE funders assess when appraising an acquisition opportunity and what can optimise value for the exiting shareholders. Furthermore, if you are operating a multisite group you might be in a position to release some equity now, and take on a PE partner to further consolidate this fragmented market. If you are contemplating a transaction do please get in touch.
