Exclusive: Morgan Stanley near deal to sell Learning Care - sources

NEW YORK Fri Apr 11, 2014 5:01pm EDT

The corporate logo of financial firm Morgan Stanley is pictured on a building in San Diego, California September 24, 2013. REUTERS/Mike Blake

The corporate logo of financial firm Morgan Stanley is pictured on a building in San Diego, California September 24, 2013.

Credit: Reuters/Mike Blake

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NEW YORK (Reuters) - Morgan Stanley's (MS.N) private equity arm is in advanced talks to sell Learning Care Group Inc, the second-largest for-profit child care provider in North America, to buyout firm American Securities LLC, people familiar with the matter said.

The deal, which is expected to come later in April, underscores the growth potential of child care providers as demand for their services grows. Shares of Bright Horizons Family Solutions Inc (BFAM.N), the largest U.S. child-care provider, have soared 76 percent since buyout firm Bain Capital LLC took it public in January 2013.

The purchase price could not be learned, but the sources said the deal would value Learning Care Group significantly higher than the $700 million valuation that Morgan Stanley assigned on the company when it acquired a 60 percent stake in 2008.

Terms are being finalized and discussions could still fall apart, cautioned the people, who asked not to be identified because the matter is confidential.

American Securities and Morgan Stanley declined to comment, while Learning Care Group did not respond to a request for comment.

Founded in 1967, Learning Care Group provides early education and child care services to children aged between six weeks and 13 years.

The Novi, Michigan-based company operates more than 900 schools in the United States and internationally, and has capacity to serve more than 100,000 children, according to its website. Its brands of child care centers include Children's Courtyard, Childtime Learning Centers and La Petite Academy.

Moody's Investors Service Inc said last year it expected Learning Care Group to post revenue of over $700 million in its 2014 fiscal year ending June.

(Reporting by Greg Roumeliotis and Soyoung Kim in New York; Editing by Bernard Orr)

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