Major childcare merger scrapped
A merger that would have seen a quarter of after-school care centres run by a single company has been called off.
Camp Australia and Junior Adventures Group, which runs OSHClub and Helping Hands centres, have announced their proposed merger has been scrapped, following a negative report from the Australian Competition and Consumer Commission (ACCC) last month.
“The proposal was always dependent on the approval of the ACCC,” Camp Australia said in a statement.
“After much consideration, we have decided not to proceed with the proposal, and we have therefore withdrawn our application.”
Camp Australia is owned by US private equity firm Bain Capital, and has become Australia’s largest provider of before and after-school care, running 780 centres and looking after nearly 50,000 kids.
The proposed deal would have given it control of another 385 centres from OSHClub and Helping Hands.
Camp Australia has been declared ineligible to win or renew government contracts in New South Wales following a number of breaches.
The planned merger had raised concerns that it could allow the company back-door entry to the NSW market.
Junior Adventures Group is a Melbourne-based company owned by the private equity firm Advent Partners.
The ACCC was not happy with the deal, saying it could result in higher fees and lower quality care.
“Our preliminary view was that the proposed merger would have substantially lessened competition for the supply of before and after-school care in Victoria, Western Australia, New South Wales, and Queensland,” said ACCC chair Rod Sims.
“Any transaction that sees the two largest players in a market merging will be closely scrutinised by the ACCC.”