Excerpts: Kohlberg Kravis Will Buy Kindercare for $467 Million

  • Kohlberg Kravis Roberts & Company said yesterday that it had agreed to buy Kindercare Learning Centers Inc., the nation’s largest preschool and child care company, for approximately $467 million, or $20.25 a share.
  • Kohlberg Kravis made the announcement along with Kindercare and Oaktree Capital Management L.L.C., a Los Angeles-based company that manages a 52 percent stake in Kindercare that is owned by TCW Special Credits, a unit of Trust Company of the West.
  • As manager of the TCW investment, Oaktree has agreed to retain a sufficient number of shares so that all other shareholders wishing to cash out will be able to do so.
  • Kindercare, which was founded in 1969, operates nearly 1,150 preschool and child care centers in 38 states and Britain. It was taken private through a leveraged buyout arranged by Drexel Burnham Lambert in 1987. Saddled with large amounts of debt, the company struggled, and filed for bankruptcy protection in November 1992. It emerged from Chapter 11 the following March.
  • TCW Special Credits bought a 37 percent equity stake when Kindercare came out of bankruptcy. In April that interest was increased to the current 52 percent.
  • Clifton S. Robbins, a Kohlberg Kravis general partner, said in a statement that “we believe the child care industry is an important and growing sector of the economy fueled by strong demographic trends.” He added, ”K.K.R. intends to support the expansion of Kindercare through internal growth and acquisitions while continuing to promote industry-leading education and quality standards.”


Source: New York Times