AppleTree & Gilden Woods sells to second-largest for-profit child care provider

AppleTree & Gilden Woods sells to second-largest for-profit child care provider

 Twenty-five years after founding AppleTree & Gilden Woods, President and CEO Brigdett VanDerHoff realized the timing was right for her to transition away from the early childhood and preschool care provider. 

The Grand Rapids Township-based company sold in July 2022 to Novi-based Learning Care Group Inc., an operator of 1,050 schools nationwide and the second-largest for-profit child care provider in North America.

“Making the decision was not an easy one, but I looked at the company and thought, ‘Now is the time to step away,’” VanDerHoff said. “It was like selling my second child.”

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AppleTree & Gilden Woods

  • Business description: Early childhood education and preschool company operating 24 schools across Michigan

  • Annual sales: Did not disclose

  • Top executive: Bridgett VanDerHoff, founder, president and CEO

  • Total Michigan employees:
    Nearly 1,000

  • Deal advisers: For AppleTreet & Gilden Woods: Miller, Johnson, Snell & Cummiskey PLC (legal), Baker Holtz PC (accounting). For Learning Care Group: Dykema Gossett PLLC (legal)

VanDerHoff launched AppleTree & Gilden Woods when her daughter was 10 months old, motivated by her experience as a new mother and a desire to offer high-quality education to all children. 

“Every decision after that opening day was made around the idea that, if this was my own child, how would I feel?” VanDerHoff said. “What started as an idea to educate, protect and raise my own child became a community.”

Since that beginning two and a half decades ago, AppleTree & Gilden Woods expanded to almost 1,000 employees and operated 27 schools across Michigan that served more than 20,000 students.

“We were a family,” VanDerHoff said. “I went to weddings. I watched girls graduate and have their first babies and get married. As you grow, that gets harder to do right, but I think growth is necessary.”

Joanna Cline, the chief marketing officer at the Learning Care Group, said the AppleTree & Gilden Woods acquisition broadened the private equity-backed firm’s reach in Michigan. Before the deal, Learning Care Group operated 43 schools, mostly in the Detroit metro area.

“Acquiring GildenWoods allowed us the opportunity to partner with an established high-quality team and allowed us to elevate our own offerings in Michigan,” Cline said. 

A portfolio company of New York-based American Securities LLC, the Learning Care Group serves children between the ages of six weeks to 12 years in 39 states and Washington, D.C. 

In looking to sell the company, VanDerHoff wanted to identify a buyer that would set up AppleTree & Gilden Woods for the future. 

“To be able to do this acquisition, it was about finding somebody that had the wherewithal,” VanDerHoff said.

AppleTree & Gilden Woods declined to disclose annual revenues. Terms of the transaction with Learning Care Group were not disclosed. 

However, Anne Marie Carson, an attorney at Grand Rapids-based Miller, Johnson, Snell & Cummiskey PLC who represented Appletree & Gilden Woods in the deal, said “it was a very meaningful transaction for its owners.”

The sale occurred amid a period of growth for the U.S daycare market, which is predicted to expand at a compound annual growth rate of 9 percent between 2022 to 2028, largely propelled by more women joining the workforce, according to a report from consulting firm SkyQuest. However, despite anticipated growth, daycare providers still face distinct challenges, including staffing shortages, COVID-19 education disruptions and profit margins as low as 1 percent. 

“Child care, historically, is a variable profit and low profit margin business,” VanDerHoff said. “Your only way to continue to grow is in the number of schools and continue to make a small profit from many locations.”

VanDerHoff believes selling to the Learning Care Group will allow AppleTree & Gilden Woods to face these industry challenges and continue to grow.

For its part, Learning Care Group plans to build upon the prior successes of AppleTree & Gilden Woods by prioritizing worker retention and involvement in Michigan’s Great Start Readiness Program, a state-funded preschool initiative.

“We understand the challenges within the industry and staffing shortages. It is not just a challenge in any one state. We see it across the country,” Cline said. “But because of our size, scale and our opportunities to meet the needs of employees, we are constantly focused on creating an environment that attracts people to our schools.”

Moving forward, VanDerHoff said she is continuing to pursue entrepreneurship through expanding a child care app she has been building and developing a restaurant entertainment venue in Manistee.

“It goes with any entrepreneur,” VanDerHoff said. “You’re always an entrepreneur.” 

EDITOR’S NOTE: This story has been updated to say that Learning Care Group operates 1,050 schools nationwide, based on more currently available data.