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Partners Group executes $1.5bn education deal

Deal marks global firm's largest direct US deal

Partners Group has agreed to acquire three children's learning companies owned by Oregon-based Knowledge Universe (KUE), according to a statement by the Swiss private equity group.

Credit Suisse, Barclays and Bank of Montreal are providing financing for the acquisition, which is valued at $1.5 billion on an enterprise basis, a source close to the transaction told Private Equity International.

Partners Group is tapping equity from funds including its $1.5 billion Direct Investments 2012 vehicle to acquire KinderCare, which operates 1,400 children's education locations in 38 states, and two other child education and care companies that do business under the brand names CCLC (Children's Creative Learning Center) and Champions.

“We like the fundamentals supporting the early-childhood segment of the education industry in particular. Specifically in the case of KUE, we believe it has a bright future in a highly fragmented market,” Joel Schwartz, managing director, private equity at Partners Group, told Private Equity International.

Partners Group and KUE officials began discussions six months ago. The deal, which is firm's largest private equity transaction in the US on its own, follows its exit in March of its investment in education provider Nobel Learning Communities held alongside Leeds Equity Group. The co-investment was sold to Investcorp, generating a four times return for the Swiss firm.

Goodwin Procter and KPMG served as legal and financial advisors to Partners Group on the KUE transaction, respectively.