KinderCare Announces Pricing of Initial Public Offering

Rhea-AI Summary

KinderCare Learning Companies, the largest private provider of early childhood education in the US by center capacity, has announced the pricing of its initial public offering (IPO). The company is offering 24,000,000 shares of common stock at $24.00 per share. Underwriters have a 30-day option to purchase up to 3,600,000 additional shares. KinderCare's stock is expected to begin trading on the New York Stock Exchange on October 9, 2024, under the symbol "KLC". The offering is set to close on October 10, 2024, subject to customary conditions.

KinderCare plans to use the net proceeds to repay existing debt and cover expenses. The IPO is led by Goldman Sachs & Co. , Morgan Stanley, Barclays, and J.P. Morgan as lead bookrunning managers, with several other firms acting as joint book-runners and co-managers.

Positive

• KinderCare is the largest private provider of early childhood education in the US by center capacity
• The company is offering 24,000,000 shares at $24.00 per share in its IPO
• KinderCare will be listed on the New York Stock Exchange, potentially increasing visibility and liquidity
• Proceeds from the IPO will be used to repay existing debt, potentially improving the company's financial position

Negative

• The IPO may lead to dilution of existing shareholders' ownership
• Repaying debt with IPO proceeds may limit funds available for growth initiatives

Insights

Financial Analyst

KinderCare's IPO pricing at $24.00 per share for 24 million shares is a significant move, potentially raising up to $576 million. This substantial capital influx could dramatically improve the company's financial position, especially as they plan to use the proceeds to repay existing debt. The IPO's size suggests strong investor interest in the early childhood education sector.

The offering's structure, including the 30-day option for underwriters to purchase additional shares, provides flexibility and could potentially increase the total raise to $662.4 million if fully exercised. The involvement of major financial institutions as lead bookrunners (Goldman Sachs, Morgan Stanley, Barclays and J.P. Morgan) lends credibility to the offering.

However, investors should note that the early childhood education market can be sensitive to economic cycles and regulatory changes. KinderCare's ability to grow and maintain profitability in a competitive landscape will be important for its post-IPO performance. The planned debt repayment could strengthen the balance sheet, potentially improving future financial flexibility and profitability.

Market Research Analyst

KinderCare's IPO reflects growing investor interest in the early childhood education sector, which has shown resilience and growth potential. As the largest private provider in the U.S. by center capacity, KinderCare is well-positioned to capitalize on increasing demand for quality childcare services.

The timing of the IPO, set for October 2024, suggests confidence in market conditions and the company's growth prospects. The childcare market is expected to expand due to factors like increasing workforce participation rates among parents and growing recognition of early education's importance.

However, potential investors should consider industry-specific challenges such as staffing shortages, regulatory compliance costs and the impact of demographic shifts. KinderCare's ability to navigate these issues while maintaining growth and profitability will be critical to its success as a public company. The IPO's reception could also serve as a barometer for investor sentiment towards the broader education and childcare sectors.

10/08/2024 - 08:07 PM

PORTLAND, Ore.--(BUSINESS WIRE)-- KinderCare Learning Companies, Inc. (“KinderCare”), the nation’s largest private provider of high-quality early childhood education by center capacity, today announced the pricing of its initial public offering of 24,000,000 shares of its common stock at a public offering price of $24.00 per share. The underwriters have a 30-day option to purchase up to 3,600,000 shares of common stock from KinderCare at the initial public offering price, less underwriting discounts and commissions. KinderCare’s common stock is expected to begin trading on The New York Stock Exchange on October 9, 2024, under the symbol “KLC.” The offering is expected to close on October 10, 2024, subject to customary closing conditions.

KinderCare intends to use the net proceeds that it receives from the offering to repay amounts outstanding under its existing indebtedness and pay expenses.

Goldman Sachs & Co. LLC, Morgan Stanley, Barclays and J.P. Morgan are acting as lead bookrunning managers for the offering. UBS Investment Bank, Baird, BMO Capital Markets, Deutsche Bank Securities and Macquarie Capital are acting as joint book-runners. Loop Capital Markets, Ramirez & Co., Inc. and R. Seelaus & Co., LLC are acting as co-managers.

The offering is being made only by means of a prospectus. A copy of the prospectus relating to the offering, when available, may be obtained from:

• Goldman Sachs & Co. LLC, Attention: Prospectus Department, 200 West Street, New York, NY 10282, email: prospectus-ny@ny.email.gs.com, Telephone: 1-866-471-2526
• Morgan Stanley & Co. LLC, Attention: Prospectus Department, 180 Varick Street, 2^nd Floor, New York, NY 10014

A registration statement on Form S-1 relating to the sale of these securities was declared effective by the Securities and Exchange Commission on October 8, 2024. This press release does not constitute an offer to sell or the solicitation of an offer to buy these securities, and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of that jurisdiction.

About KinderCare Learning Companies™
A leading private provider of early childhood and school-age education and care, KinderCare builds confidence for life in children and families from all backgrounds. KinderCare supports hardworking families in 40 states and the District of Columbia with differentiated flexible child care solutions:

• In neighborhoods, with KinderCare® Learning Centers that offer early learning programs for children six weeks to 12 years old;
• Crème Schools®, which offers a premium early education model using a variety of themed classrooms; and
• In local schools, with Champions® before and after-school programs.

KinderCare partners with employers nationwide to address the child care needs of today’s dynamic workforce. We provide customized family care benefits for organizations, including care for young children on or near the site where their parents work, tuition benefits, and backup care where KinderCare programs are located. Headquartered in Lake Oswego, Oregon, KinderCare operates more than 2,400 early learning centers and sites.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241008260552/en/

Investor

Sloan Bohlen, Solebury Strategic Communications

investors@kindercare.com

Media

Stephanie Knight, Solebury Strategic Communications

media@kindercare.com

Source: KinderCare

FAQ

When will KinderCare (KLC) stock begin trading on the New York Stock Exchange?

KinderCare (KLC) stock is expected to begin trading on the New York Stock Exchange on October 9, 2024.

How many shares is KinderCare (KLC) offering in its IPO?

KinderCare (KLC) is offering 24,000,000 shares of common stock in its initial public offering.

What is the price per share for KinderCare's (KLC) IPO?

The price per share for KinderCare's (KLC) IPO is set at $24.00.

How will KinderCare (KLC) use the proceeds from its IPO?

KinderCare (KLC) intends to use the net proceeds from the IPO to repay amounts outstanding under its existing indebtedness and pay expenses.