KinderCare Learning Centers and Knowledge
Learning Corporation Announce Merger Agreement
(Portland, Ore.) – November 5,
2004 – KinderCare Learning Centers,
Inc. and Knowledge Learning Corporation jointly
announced today the execution of a definitive
merger agreement pursuant to which an affiliate
of Knowledge Learning Corporation will acquire
KinderCare. The buyer will pay approximately
$550.3 million in cash for all outstanding equity
of KinderCare and will assume or repay approximately
$490 million of KinderCare’s debt. The
per share purchase price is determined by a
formula that the parties estimate will result
in a price of approximately $25.94 per share
of KinderCare stock, $24.74 of which would be
paid upon closing, and $1.20 of which would
be placed in escrow for one year to satisfy
indemnification obligations.
Upon completion of the transaction, the combined
companies will have 1,980 centers, 461 before-and-after
school programs, and 134 employer-sponsored
child care centers in 39 states and the District
of Columbia serving more than 200,000 children
and their families and employing approximately
45,000 people.
The transaction was unanimously approved by
the directors of KinderCare. Shareholders of
KinderCare, including affiliates of Kohlberg
Kravis Roberts & Co. and Oaktree Capital
Management, LLC, who currently own in excess
of 90 percent of KinderCare’s outstanding
shares, are parties to the merger agreement.
Thomas A. Heymann, Chairman and CEO of Knowledge
Learning Corporation, said, “This merger
brings together the finest early childhood care
and education companies in America. Our combined
resources and trained employees will enable
us to establish higher standards in the delivery
of care that will help children enter school
ready to learn and build a lifetime love of
learning.” Heymann will head the combined
organization.
The transaction is conditioned on the expiration
of the applicable waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act, the receipt of third-party
consents and governmental approvals, and other
customary closing conditions. The transaction
is not conditioned on the obtaining of financing
or any stockholder vote and does not require
a stockholder meeting. KinderCare and Knowledge
Learning Corporation plan to complete the transaction
by December 31, 2004.
About KinderCare
KinderCare Learning Centers, Inc. (www.kindercare.com),
based in Portland, Oregon, is the nation’s
leading provider of early childhood education
and care to children between the ages of six
weeks and 12 years. KinderCare and its subsidiary
Mulberry Child Care and Preschool operate a
total of 1,230 early childhood education and
care centers, serve approximately 118,000 children
and their families, and employ more than 27,000
people. Included within KinderCare’s 1,230
centers are 44 employer-sponsored centers. Additionally,
KinderCare has 11 service contracts to operate
before- and after-school programs.
In addition to its early childhood education
centers, KinderCare’s wholly owned subsidiary,
KC Distance Learning, Inc., owns and operates
a distance learning company serving teenagers
and young adults in three business units: Keystone
National High School, Learning and Evaluation
Center, and iQ Academies.
About Knowledge Learning Corporation
Knowledge Learning Corporation is a leading
provider of early childhood education programs
and services operating under several names,
including Children’s Discovery Centers,
Knowledge Beginnings, Magic Years and Children’s
World. Knowledge Learning Corporation’s
family of schools includes 750 community child
care centers, 450 before- and after-school programs
and 90 employer sponsored child care centers
located in 32 states.
Forward-Looking Statements
Notice
This release contains “forward-looking”
statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Generally,
forward-looking statements express expectations
for or about the future, rather than historical
fact. Forward-looking statements are subject
to inherent risks and uncertainties that may
cause actual results or events to differ materially
from those contemplated by such statements.
Such risks and uncertainties include, among
others, the timing (including any possible delays)
and receipt of regulatory approvals (including
any conditions, limitations or restrictions
placed thereon), as well as the risk that one
or more governmental agencies may deny approval
of the transaction and other factors that may
be referred to in the KinderCare reports filed
with the Securities and Exchange Commission
from time to time.
Contacts:
KinderCare Learning Centers, Inc.
Jill Eiland, Senior Director of Public Relations
(503) 872-1519
Knowledge Learning Corporation
Lisa Goldstein
(310) 570-4566
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