KKR exits child care centers for $1.04bn

Global buyout house Kohlberg Kravis Roberts is selling its majority stake in KinderCare to daycare center operator Knowledge Learning Corp.

Global buyout giant Kohlberg Kravis Roberts has signed a deal to sell its shares of KinderCare Learning Centers to the Knowledge Learning Corporation for approximately $550 million (€425 million).

Knowledge Learning will also assume approximately $490 million (€379 million) of KinderCare’s debt, according to a statement.

KinderCare, based in Portland, Oregon, operates more than 1,200 preschool and child-care centers across the United States. Knowledge Learning provides early childhood programs, including Children’s Discovery Centers, through 750 community childcare centers, 450 before- and after-school programs, and 90 employer-sponsored childcare centers in the US.

New York-based KKR originally acquired a majority interest in KinderCare from Oaktree Capital Management in a $570 million leveraged recapitalisation in 1997; the firm invested $148.8 million in the company. Los Angeles-based Oaktree, which retained about a 10 percent stake in the company following the recap, is also selling off its stake.

KKR’s most recent exit was last month’s sale of German telecommunications equipment maker Tenovis to Internet phone parts company Avaya for a reported $800 million (€650 million). KKR bought Tenovis in 2000 in a management buyout from German engineering group Robert Bosch for $530 million.

KKR’s record of success was highlighted last month as well, when the Financial Times reported that the firm had returned $9 billion (€7.2 billion) in cash to investors in the last 18 months. The figure includes capital drawn from investors as well as profits made from investments.

Of course, KKR’s largest deal of the year was the headliner sale of more than half of its stake in PanAmSat, the US satellite operator it agreed in April to buy for $3.55 billion to The Carlyle Group and Providence Equity Partners.