Bain Capital Partners plans to augment its retail/consumer holdings with the $1.3 billion (€884 million) take-private of child care chain Bright Horizons Family Solutions. A spokesman declined to break down the deal’s debt and equity components, though Bain said in a statement that debt financing has been committed by Goldman Sachs Credit Partners, the investment bank’s chief corporate lending arm, and GS Mezzanine Partners V, which is rumoured to have moved its target to $20 billion from $12.5 billion.
Bright Horizons, which operates more than 600 employer-sponsored early care and “family centers” in the US, UK, Ireland and Canada, has a market cap of just over $1 billion.
Bain has agreed to pay Bright Horizon stockholders $48.25 per share in cash, a 47 percent premium over the closing share price on 11 January. Expected to close in the second quarter of 2008, the deal is subject to regulatory and shareholder approval and includes a 60-day ‘go-shop’ period.
“Bain Capital will fully support Bright Horizons in continuing to deliver on its well-established reputation for providing employers and parents with the highest-quality child care, early education and work/life solutions,” Andrew Balson, a Bain managing director, said in a statement.
Goldman Sachs and Evercore Group are financial advisors, while Shearman & Sterling is legal counsel for Bright Horizon’s special committee of the board of directors. Bass, Berry & Sims is legal advisor to Bright Horizons, while Ropes & Gray is providing legal counsel to Bain.
Bain joins other private equity firms with its interest in the daycare/early education sector. In June 2007, UK midmarket firm Sovereign Capital paid £2.2 million for Paediatric Nursing Link, provider of child care for hospital staffs. Three years ago, Kohlberg Kravis Roberts had a lucrative, $1.04 billion exit from the sale of its stake in US preschool chain KinderCare; the firm invested approximately $149 million in the company during a 1997 leveraged recapitalisation, which passed a controlling stake in KinderCare to KKR from Oaktree Capital Management.
Bain’s retail portfolio includes the Dunkin’ Donuts, Michaels Stores and Domino’s Pizza chains.