Child Care Centre Multiples in Australia: Why They’re Higher

If you’ve heard that child care centres trade at richer multiples than many other service businesses in Australia, you’re not wrong. Buyers consistently pay up for quality centres because the revenue is sticky, the demand trend is long-run positive, and government co-funding underpins affordability for parents. Below is the practical view I give owners and buyers at the coalface.

The quick take: where multiples land

Most single-site centres: ~3.8×–4.5× EBITDA (owner light-touch, clean compliance, good lease).

Professionalised multi-site operators ($1–3m EBITDA): ~4.5×–5.2× EBITDA.

Institutional-grade portfolios ($3m+ EBITDA): can push ~5.0×–5.5×+ when the story is tight.

Ranges tighten or widen with occupancy, lease quality, compliance history, and how dependent the business is on the owner.

Why child care commands a premium vs many industries

Durable, policy-supported demand. Dual-income households and labour-force participation keep utilisation high; government funding helps parents afford care, reducing demand volatility.

“Sticky” enrolments. Once children enrol, they typically attend multiple days per week and stay for years, creating unusually predictable, recurring revenue.

Constrained, regulated supply. Planning, ratios, and quality standards create operating moats for well-run centres and limit fly-by-night competition.

Portfolio effects. Multi-site operators benefit from shared staffing, centralised compliance, and group purchasing—margins and resilience improve with scale, lifting the multiple.

What can quickly drag the multiple down

Occupancy under ~75% or thin waitlists.

Short lease tail (or rent > ~15% of revenue).

Heavy owner-dependence (licensee/director embedded day-to-day).

Patchy compliance/NQS issues or adverse audit history.

Local oversupply (new centres opening within the same catchment).

Wage pressure and staffing shortages pushing ratios and overtime.

How to earn the top of the range (a broker’s checklist)

Prove demand: 12–24 months of >85% occupancy, stable fee uplift history, and documented waitlists by room.

De-risk the owner factor: appoint a competent nominated supervisor, strong 2IC, and keep the owner out of the roster.

Lease for value: secure 10–20 years effective term (including options) with fair rent-to-revenue; pre-negotiate assignment clauses.

Showcase compliance: current exceeding/meeting NQS with evidence; no unresolved compliance actions.

Staff stability: track and present tenure, training, turnover; employee value proposition matters.

Bundle smart: two to five centres in the same metro region often price better together than apart.

Tidy the numbers: QoE-style normalisations (ratios, relief staff, one-offs), clean capex profile, and a simple KPI pack buyers can underwrite.

Deal structure & timeline reality (Australian norms)

Deal mix: Under ~$5m EV, expect meaningful buyer equity.

Runway: Start sale prep ~12 months ahead; typical listing-to-close is 7–13 months, with 3.5–5 months from LOI to completion if diligence is smooth.

Presentation: A tight IM with centre-level metrics (occupancy by room, fee schedules, staffing ratios, incidents, NQS evidence) materially improves outcomes.

SDE vs EBITDA—use the right lens

Owner-operator centres with low management overhead are often priced on SDE (and trade lower on a multiple basis).

Under-management centres should be priced on EBITDA—and command higher multiples when the owner isn’t essential to day-to-day operations.

Bottom line

Child care centres do trade at higher multiples than many other industries because demand is long-term, government funding supports affordability, and enrolments are sticky across regular days each week for a number of years. If you want the top of the range, make the business less about you, more about systems—and prove the demand with data.