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Saturday, 21 January 2017 05:33

Childcare Centres - Buyer and Seller Information

Due Diligence:

This aspect is now quite common in assessing the possible acquisition of Child Care Centres' Professionals such as Accountants, Legal Practitioners may become involved in the said process. This activity can possibly have a timeframe of and from 7 days up to +/- 90 days.

Finance:

With all things being equal, Financiers (*) will have a LVR of +/- 40.0% on the business component of a Centres' with all things being equal, Financiers (*) will have a LVR of +/- 60.0% on the property component of a Centres';Power ABA can assist persons - at "arms length" - if need be.

Industry Assistance/South Australia:

Contact the Child Care Owners Association of SA .This association normally have regular and on-going training, annual conferences, and the like.

The Federal government maintains a web site. this portal provides data about rebates, subsidies, operational ratios , family assist, and the like

Licensing:

All states throughout Australia maintain governance and licensing for CCC operators.New CCC's shall require "new" licence's".Existing CCC's shall require existing licence transfer; from the Seller to the Buyer. Each state has a "suitability process" and accordingly this aspect has to be completed before wishing to enter into a contractual arrangement.This aspect will expedient the said and due process.

Management:

There are specialist management firms that offer their management processes (schemes) for the management of Child Care Centres.

Processes include management, operational, staffing, marketing, rebate/subsidy claims .

Non Disclosure/Confidentiality:

Vendors/Sellers have the privilege to know that any/all information provided to the Broker to assist them in the marketing of their business shall be maintained "commercial in confidence";and treated in confidence by any/all interested persons/parties. Accordingly, any/all parties shall be required to sign off on a Non Disclosure Agreement/Buyers Enquiry Form before any details are revealed. Of course due qualification of the purchaser is part of the process.

Viability:

There are several methods to assess a "fair market price of a Child Care Centres'

You may encounter "rule of thumb"; "x' amount of "$" per placement.
Other methods will embrace and envelope:-

* return on investment [roi]

* return to owner [rto]

* future maintainable earnings (super net profit) method.

The ratios will/may alter subject to:-

* property

* business

* location

* placements

* occupancy

* socio demographics

* socio economics

# Leasehold (Business) +/- 18.0% to 25.0% - enveloping a secure and long tenure

# Freehold (Business) +/- **.0% to **.0% -