Bain Capital to buy Bright Horizons for $1.3 bln

By Michael Flaherty

NEW YORK (Reuters) - Bright Horizons Family Solutions Inc BFAM.O, a provider of employer-sponsored child care and early education, said on Monday it would be bought by private equity firm Bain Capital for $1.3 billion.

The deal highlights a major shift going on in the private equity sector, where the credit crunch and lending squeeze are causing big buyout firms to borrow less and chase smaller deals.

Bright Horizons shares rose 34 percent to $44.07 on the Nasdaq.

The deal also shows how even in the midst of the crunch, Bain Capital is signing up deals while many of their rivals have sat on the sidelines since the summer. Bain signed a deal with health care company Quintiles Transnational Corp late in December and agreed -- with a Chinese partner -- to buy network equipment maker 3Com Corp (COMS.O: Quote, Profile, Research, Stock Buzz) for $2.2 billion in September.

Bain will pay $48.25 per share, a 47 percent premium over Bright Horizons' closing share price on Friday.

The deal has a 60-day "go-shop" period, in which Bright Horizons can solicit other bids.

Debt financing for the deal was provided by Goldman Sachs Credit Partners L.P. and GS Mezzanine Partners V L.P., two divisions of investment bank Goldman Sachs Group Inc (GS.N: Quote, Profile, Research, Stock Buzz).

Bain will pay $640 million of its own cash and borrow $850 million from Goldman, according to a filing. When the credit markets were frothy before the summer's subprime mortgage meltdown, private equity firms often borrowed around 70 percent or more of a company's asking price.