A good start for new childcare operator

September 22, 2010 by  
Filed under Case studies, Featured, GoodStart, Public Affairs

Issue

In mid-2009 a group of respected not-for-profits formed a company called GoodStart to buy ABC Learning, a childcare business that had been in receivership since its very public collapse in 2008. Strong public affairs support was required to promote the bid’s financial, social and business credentials to key stakeholders.

Challenges

While the individual not-for-profits – the Brotherhood of St Laurence, the Benevolent Society, Mission Australia and Social Ventures Australia – had strong reputations in their respective fields, they were not known for running childcare or for their business credentials. A number of other organisations were also interested in buying ABC Learning, including private equity and existing childcare providers.

Insights

Four aspects of the bid could be exploited to provide the best chance of success:

•        The four not-for-profits possessed powerful brands that were known for decades – and in some cases centuries – of caring for Australia’s less fortunate

•        As a not-for-profit GoodStart potentially had access to tax advantages unavailable to other bidders

•        To a large part GoodStart’s aims mirrored the Federal Government’s own childcare policies

•        The reckless management of ABC Learning by its previous owner had fostered negative community   attitudes about large, for-profit childcare operators

Campaign

Although the final decision on the purchase was the Receivers’, the Federal Government was a key stakeholder and its support would be crucial to the success of the bid. In fact, Government engagement was so successful it ended up lending GoodStart $15 million to complete financing. We supported the bid’s financial advisers in their successful approaches to government to unlock significant tax advantages. We promoted the ‘caring’ nature of the work of the four not-for-profits in the media alongside the involvement of prominent businesspeople and investors. At the same time, the strategic provision to media of publicly available information on competitor bidders assisted in two of those players withdrawing from the process.

Results

GoodStart was announced as the preferred bidder in late December 2009, with the announcement receiving widespread coverage and crucial union endorsement. The finalisation of the sale contract in May 2010 was marked by a media conference with the Deputy Prime Minister  Julia Gillard, the Minister for Early Childhood Education Kate Ellis and GoodStart CEO Matthew Horton. This also received widespread coverage using compelling images of the ministers with young children at one of the company’s metropolitan childcare centres.