KinderCare postpones IPO citing regulatory issues

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Summary

  • The large U.S. operator of child-care centers aimed to raise at least $460 million in the offering

KinderCare Education, one of the nation’s largest for-profit child-care providers, said it would indefinitely delay an initial public offering due to unspecified regulatory delays.

Portland, Ore.-based KinderCare aimed to raise at least $460 million in an offering that would have valued the company at around $3 billion. It was slated to make its market debut Thursday on the New York Stock Exchange with the ticker KLC.

“Due to regulatory delays outside of our control we have decided to postpone our IPO," the company said Friday in a statement. “This is a true disappointment, as the IPO was going to allow us to grow faster and serve more hardworking families while furthering our mission to provide future generations with confidence for life."

The company declined to comment beyond its statement.

KinderCare lost $129 million in 2020 and revenue fell by nearly 30% from the prior year to $1.4 billion, which the company attributed to Covid-related closures. The company said it received $180 million in federal funding last year in Covid relief funds.

Business has since picked up but remains below pre-pandemic levels. Revenue for the nine months ended Oct. 3 was $1.3 billion. Full-year revenue was $1.9 billion in 2019.

The company says it is the largest private U.S. operator of child-care centers by capacity. Its biggest competitors are publicly traded Bright Horizons Family Solutions Inc. and Learning Care Group Inc., which is privately held.

In its IPO pitch, KinderCare said that its size helps it offer more flexible options for parents and employers. The U.S. child-care industry is highly fragmented; single-site operations and small chains make up some 95% of the $40 billion sector.

Earlier this month, KinderCare said in a regulatory filing that it planned to offer 25.8 million shares at a price range of $18 to $21. “We’ve received healthy interest from investors and positive feedback on KinderCare’s potential," the company said.

 

This story has been published from a wire agency feed without modifications to the text

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