Big Fat Smile and Goodstart Early Learning have entered into a merger agreement that is set to bring the two large early learning and care providers together by July.
The merger is expected to be finalised by end of June and will result in a large not-for-profit organisation with 706 centres across Australia..
Chief executive Jenni Hutchins said Big Fat Smile, which began life as Illawarra Children's Services Action Group in 1981, will continue to operate independently with its own branded centres and management for the 5,400 children who use its services.
And will continue to provide the same high quality services to families and the community with the support of Goodstart. With 665 centres it is Australia's largest early learning and care provider.
Ms Hutchins said the agreement was many months in the making and will ensure the Illawarra-based organisation has the financial stability it needs. And that will ensure the longevity of the Big Fat Smile organisation for future generations.
"Over the past year it has become increasingly difficult to maintain our financial sustainability despite the high-quality early education and care our 41 centres and 700 staff provide to families across the Illawarra, the ACT and other parts of NSW," she said,
"Our sector has experienced many pressures over recent years and it has become increasingly difficult to maintain our financial sustainability.
"We have worked with Goodstart for some time, learning from their experience navigating the competitive early learning market."
"Goodstart has demonstrated a not-for-profit enterprise can be both financially sustainable and true to their social purpose.
"Their economies of scale offer us a huge advantage and degree of protection from market forces in uncertain times.
"I know our families, staff and the broader community will be very excited to know that our future is secure".
Goodstart chief executive Julia Davison said the merger would be an alliance between not-for-profit organisations with a shared commitment to children's learning, development and wellbeing.
"Big Fat Smile brings an impressive track record of highest quality early education for children and service to community. There is much we can learn and leverage from each other," she said.
"The early learning and care sector is becoming increasingly competitive and by joining forces with Big Fat Smile we will be in a strong position to ensure their valuable work continues."
"Over many months we've been working on ways to help secure Big Fat Smile's sustainability it has become clear that a merger was the most practical way forward.
"Big Fat Smile has decades of history and its high-quality centres and services will continue.
"We share the core objectives of delivering quality, affordable and accessible early education and care, with a particular focus on children and families experiencing vulnerability."
"The Big Fat Smile services will continue to operate independently. They have deep roots in communities across the Illawarra as well as the Sydney Metropolitan Area, Southern Highlands, Wollondilly and Tablelands.
"Maintaining their independent operations will enable them to continue a stable presence in those regions, with our national backing.
"We look forward to ensuring Big Fat Smile's commitment to children's learning, development and wellbeing continues without interruption".
As the organisation moves under the umbrella of Goodstart, three of Big Fat Smile's board members will remain on the board, including the present chair David Campbell.
Big Fat Smile will welcome four Goodstart board members to make up the complement of seven.
Mr Campbell said the not-for-profit ethos shared by both entities is a win for employees, families and communities Big Fat Smile serves.
"Our organisations exist for children and families," he said.
"This will be a merger between friends and allies that will deliver a more certain future for all".
Mr Campbell said merger talks started in 2019 and pre-dated COVID-19.
He said the merger was not in response to the coronavirus.
"It is a project we have been working on for about six months," he said.
"It really about us moving forward strategically to secure the sustainability of Big Fat Smile.
"But the shock of COVID where a lot of families withdrew their children reinforced we were doing the right thing for the future".
Ms Hutchins said each of the not-for-profit early learning and care providers had been looking at their long term sustainability well before any talks of a merger began.
In both cases the key issue of concern has been about maintaining the quality of care they provide and maintaining the workforce they each have.
Mr Campbell said they were both like-minded organisations on both perspectives of wanting to do the best for the families who use their services and their employees.
They also wanted to be well positioned in an increasingly competitive sector.
"And we will continue to operate as Big Fat Smile. We won't suddenly be rebranding to something else," he said.
"It will be Big Fat Smile with our staff providing that early learning and care to the children".
Ms Hutchins said what was important to Big Fat Smile's staff was being able to continue providing exceptionally high quality service delivery.
"We know that. And nationally we are known for that. Wat we are really proud of is we are partnering with a not-for-profit who also focuses on and has the same ethos we do," she said.
"With this merger we will be able to maintain the Big Fat Smile brand and quality we are proud of".
With all students returning to primary and secondary school in NSW next week Big Fat Smile is expecting many children will also return to its early learning centres.
"We have an ongoing review of our service delivery and communication is strong with our families," Ms Hutchins said.
"They are letting us know about their movements and letting us know when their children are coming back.
"We are on track to manage that. And our staff are really excited to see the children who have had some time away with their families".
Mr Campbell said all Big Fat Smile centres have been open throughout the coronavirus crisis which have been operating with reduced numbers.
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