Small cap darling G8 Education’s stellar run has another childcare roll-up, Affinity Education, preparing for a $77 million equity raising this week and December 11 ASX debut.

CBA Equities has shown Affinity to fund managers over the past week and about a fortnight ago took a small group of investors up to Brisbane to show them around some of Affinity’s 68 childcare centres.

Affinity has plans to buy 57 centres using funds from the IPO and manage another 11. It plans to buy the centres at an average 4.1-times earnings before interest and tax, which is slightly above the 4-times maximum that G8 likes to pay for its targets.

Fund managers have been quick to note CBA’s involvement in the deal. Australia’s biggest bank has been notoriously absent from childcare since dusting north of $400 million as a lender and underwriter to the now defunct ABC Learning. It’s thought CBA has put $20 million debt into Affinity and will likely underwrite the float following a bookbuild scheduled for Wednesday.

Fund managers told Street Talk Affinity looks like it has been priced to go. It is seeking to raise $77 million on a 10.75-times price-to-earnings multiple, while G8 trades at about 25-times.

While investors understand the roll-up’s logic, there has been some discussion around Affinity’s board and management. It is chaired by Colonial State Bank former managing director Stuart James, while the chief executive is former Energy Development and NAB-er Justin Laboo. For experience in the sector, investors have been pointed to chief operating officer Gabrielle Giufre, who founded Bambini Group, which owns 13 childcare centres.

Other board members include Corrs Chambers Westgarth partner Stephanie Daveson and former Cardno executive Jeff Forbes.