KinderCare Learning Companies (KLC) Registration Filing summary

Company overview and business model

• Operates over 1,500 early childhood education centers and 900 before- and after-school sites in 40 states and D.C., serving children from six weeks to 12 years old.

• Largest private provider of early childhood education (ECE) in the U.S. by center capacity, with a mission-driven, inclusive approach.

• Offers services through three brands: KCLC (community-based centers), Crème School (premium centers), and Champions (before- and after-school programs).

• Employer-facing business provides customized family care benefits, including onsite centers and tuition benefits for over 700 employers.

• Differentiates through proprietary curriculum, high accreditation rates (>80%), and a focus on educational excellence, people engagement, health & safety, and operational growth.

Financial performance and metrics

• Fiscal 2023 revenue: $2.51 billion; net income: $102.6 million; Adjusted EBITDA: $266.4 million.

• Six months ended June 29, 2024: revenue $1.34 billion, net income $26.8 million, Adjusted EBITDA $160.8 million.

• Same-center revenue grew at an 8.6% CAGR from 2018 to 2023; 2023 same-center occupancy was 69% (71% excluding Crème School).

• Cost of services (excluding depreciation/impairment) increased 28.1% in 2023, driven by higher personnel costs, enrollment, and reduced COVID-19 stimulus.

• Subsidy revenue from government agencies was $795.9 million in 2023.

Use of proceeds and capital allocation

• Net proceeds of ~$555.7 million (at $25/share midpoint) will be used to repay $548.4 million of First Lien Term Loan Facility debt and pay $7.3 million in expenses.

• If underwriters exercise their option, proceeds increase to $640.5 million, all for debt repayment.

• No plans to pay dividends in the foreseeable future; future earnings to be retained for growth and debt service.