Someone at KinderCare (KLC) must like the sight and sound of 24: KinderCare priced its IPO at $24 – $1 above the low end of its $23-to-$27 range – and sold 24.0 million shares – the number of shares in the prospectus – to raise $576 million on Tuesday night, Oct. 8, 2024. At pricing, KinderCare’s IPO raised $24 million less than it would have – if the deal had been priced at the $25 mid-point of its range. The market cap was about $2.75 billion at pricing. (Editor’s Note: This column, published Tuesday night, was updated early Wednesday afternoon after KinderCare started trading on the NYSE.)
KinderCare’s stock opened Wednesday, Oct. 9, 2024, at $27.00 – up $3.00 from its IPO price – in its debut on the New York Stock Exchange. Around 2 p.m. EDT on Wednesday, KinderCare’s stock was trading at $26.26. By 2:55 p.m. EDT, KinderCare’s stock was trading at $26.56 on the NYSE.
Goldman Sachs, Morgan Stanley, Barclays and J.P. Morgan led the joint book-runners’ team. UBS Investment Bank, Baird, BMO Capital Markets, Deutsche Bank Securities and Macquarie Capital also served as book-runners for KinderCare’s IPO.
KinderCare plans to use the IPO’s proceeds to pay off about $527.2 million of debt and $7.3 million of related expenses, according to the prospectus. KinderCare’s total debt outstanding was about $1.58 billion as of June 29, 2024.
KinderCare, based in the Portland, Oregon, suburb of Lake Oswego, runs over 1,500 early childhood education centers with the capacity to care for over 200,000 children and operates about 900 before- and after-school sites in 40 states and the District of Columbia. Those figures were updated as of June 29, 2024, the prospectus said. KinderCare was founded in 1969.
The IPO’s pricing represented KinderCare’s second time at bat. KinderCare abruptly postponed its IPO in November 2021. Partners Group Holding AG, a Swiss private equity firm, will still own the controlling stake in KinderCare after the IPO.
KinderCare’s business is profitable. For the 12 months that ended June 29, 2024, KinderCare earned net income of $57.65 million on revenue of $2.59 billion.
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