Good evening,

It’s exam time for Pacific Equity Partners′ dealmakers, who’ve submitted a non-binding indicative offer for Swiss buyout firm Partners Group’s Guardian Childcare and Education, and will spend the coming weeks grading the $110 million-a-year business’ future prospects.

Street Talk can reveal the $11 billion buyout firm was among parties that tabled first-round offers for Guardian by last week’s deadline. PEP has mandated Stanton Road Partners for advice. It already has school supplies provider Modern Star, but is yet to sink its teeth into a childcare deal.

PEP’s interest comes as the $US149 billion ($227.2 billion) Partners Group resurrects its exit preparations, after being slowed down by the Productivity Commission’s early childhood education review and revised award pay levels for employees. It has owned the business since 2016, when it paid $440 million to buy what was then called Guardian Early Learning from Pan-Asian PE investor Navis Capital.

Sources said the rebooted sale, being run by Morgan Stanley, is fielding interest from financial sponsors but not many trade players are in the mix. In May, Guardian extended about $500 million of borrowings by two years in a deal that saw existing lenders – Commonwealth Bank, Macquarie, ICG and Aware Super – roll into the new facility.

Guardian’s EBITDA for the year to December 31 is now expected to come in at more than $110 million, higher than $80 million to $100 million a year back in 2022.

More than 150,000 children attend Guardian’s 160 centres, most of which are located in capital cities like Brisbane, Sydney, Canberra, Melbourne and Adelaide.

Read the full story tomorrow and more on the Street Talk page.

• AirTrunk bidder Global Infrastructure Partners is in talks to join a rival consortium led by IFM Investors and NYSE-listed DigitalBridge, in what could transform the $20 billion auction into a two-horse race.
• In a blast from the past, Quadrant Private Equity will provide equity for employment group APM’s take-private by Madison Dearborn.
• Ireland’s BNRG Renewables is making a mini-but-mighty pitch to seek backers for a collection of sub-5MW solar projects in Victoria.

• Merger crackdown to make ACCC ‘judge and jury’ on deals, as draft laws released by Treasury propose expanding its powers.
• Why M&A arb funds are sitting out ‘the trade of the year’.
• Macquarie is set to take full control of Britain’s core gas transmission network in a roughly £700 million ($1.37 billion) deal.
• Hedge fund Bill Ackman’s NYSE-listing of Pershing Square USA is facing regulatory delays, after drastically reducing the offer size from $US25 billion ($38.1 billion) to a maximum of $US4 billion.

Quadrant sold its stake to Madison Dearborn in 2020, which listed APM on the ASX the following year at a $3.8 billion enterprise valuation. Now, its back for a slice.

Click here for the latest equity market wrap.