Private School And Daycare For Sale: Three Factors That Determine Its Attractiveness to Buyers

Strong student numbers and a healthy EBITDA are not enough to make a school an attractive acquisition opportunity. What matters is whether the school can operate independently of its current owner, generate sustainable income and demonstrate a transparent financial position.

When the owner of a private school, nursery or other education business considers selling, the first questions are usually about value: How much is the business worth? What price can I expect to achieve? Which buyers might be interested?

A professional buyer approaches the question from a different perspective. Their first priority is to understand how robust the business model is, where the key dependencies lie and what risks they would be taking on after the acquisition.

At SolutionSync, our experience has shown that three factors play a decisive role in determining how attractive an education business is to potential buyers. These are often the first three questions buyers seek to clarify in their initial discussions.

1. Can the school operate without its owner?

Many private schools remain closely tied to their founder or owner. They know the families personally, maintain relationships with the authorities, are involved in recruiting teachers and make a large proportion of the strategic and operational decisions.

What can be a strength in day-to-day operations can quickly become a risk when the time comes to transfer ownership.

A buyer wants to know whether the school has an independent management and academic leadership team, who maintains its key relationships and whether important decisions can be made without the current owner's involvement.

If the acquisition requires an additional managing director or headteacher to be appointed, the associated costs will reduce the school's sustainable earnings and potentially its value.

What owners can do: Build a capable second tier of management, delegate responsibilities and prepare the organisation well in advance to operate successfully without their direct involvement.

2. How sustainable are the revenues?

High turnover is worth little if it depends on a handful of customers, individual referral partners or uncertain sources of funding.

For private schools, buyers typically examine:

• Student numbers, re-enrolment rates and the geographical markets from which students are recruited.

• Dependence on individual families, recruitment agencies or other partners.

• Occupancy levels and available capacity for growth.

• The stability of demand and the school's competitive positioning.

For nurseries and childcare businesses, the analysis also considers children leaving as they reach school age, parental fees, cantonal and municipal subsidies, and service agreements. The underlying economics of these arrangements and the reliability of funding over the longer term are particularly important.

Unused capacity can also represent an opportunity. A school with 200 pupils and facilities designed for 300 could offer a strategic buyer considerable scope for growth, provided demand, staffing and funding are sufficient to support that expansion.

What owners can do: Clearly document the revenue mix, occupancy levels, pupil trends and key customers or funding partners. Buyers want to understand not only how much revenue the business generates, but also how recurring and reliable that income is.

3. Are the financial figures transparent and verifiable?

The quality of a business's preparation for sale often becomes apparent during financial due diligence.

In owner-managed education businesses, the accounts frequently require further analysis. This may include the owner's remuneration, exceptional expenses, one-off investments or rental arrangements between the operating business and the property company that do not reflect market rates.

The focus is on normalised EBITDA: the business's sustainable earnings after adjusting for items that do not reflect its ongoing trading performance.

The objective is not to make as many adjustments as possible, but to ensure that every adjustment is commercially justified and supported by clear evidence.

Where a school owns its own property, the value of the operating business must also be distinguished from the value of the real estate. Rental costs, future capital expenditure and the property valuation must all form part of a financially coherent overall picture.

What owners can do: Prepare consistent financial information for at least three financial years, document all EBITDA adjustments and ensure that the management accounts can be clearly reconciled with the statutory financial statements.

A business's value is built long before it comes to market.

Together, these three factors determine how successfully a school can be transferred to a new owner and continue to thrive under new ownership.

Unlike many traditional SMEs, acquiring a school involves more than taking over staff, contracts and customer relationships. It also requires continuity in teaching and learning, maintaining the trust of families, protecting the school's reputation, preserving accreditations and meeting regulatory requirements.

Ultimately, a buyer is not simply acquiring an established institution. They are investing in its ability to operate sustainably and realise its future growth potential.

SolutionSync specialises exclusively in M&A in the education and childcare sectors. We advise owners of private schools, international schools and childcare groups on succession planning, business sales and strategic investment opportunities.

Our experience confirms that the foundations for a successful sale are laid long before a business is formally brought to market.

Our advice: Do not wait until you are ready to sell before planning your succession. Build a business today that can continue to perform and thrive tomorrow, even without you.