Research Update: Bright Horizons Family Solutions LLC Outlook Revised To Positive On Improving Utilization; 'B+' Rating affirmed

Massachusetts-based Bright Horizons Family Solutions LLC's recent demand trends have stabilized enrollment and capacity utilization rates, and we expect them to continue to improving for the next 12 months. The company outperformed our 2020 revenue and EBITDA expectations on good cost management, resulting in net adjusted debt to EBITDA of 4.2x, compared to our forecast of mid- to high-5x. The company ended 2020 with $384.3 million of cash, including roughly $250 million of net proceeds from its April 2020 common equity raise. Although we believe the company will direct a majority of its high cash balance toward acquisitions, shareholder returns and debt reduction, we expect leverage will improve from EBITDA and cash flow growth as the economy recovers. Therefore, we

...- Massachusetts-based Bright Horizons Family Solutions LLC's recent demand trends have stabilized enrollment and capacity utilization rates, and we expect them to continue to improving for the next 12 months. - The company outperformed our 2020 revenue and EBITDA expectations on good cost management, resulting in net adjusted debt to EBITDA of 4.2x, compared to our forecast of mid- to high-5x. The company ended 2020 with $384.3 million of cash, including roughly $250 million of net proceeds from its April 2020 common equity raise. - Although we believe the company will direct a majority of its high cash balance toward acquisitions, shareholder returns and debt reduction, we expect leverage will improve from EBITDA and cash flow growth as the economy recovers. - Therefore, we revised the outlook on Bright Horizons to positive from negative and affirmed the 'B+' issuer credit rating. The issue-level and recovery ratings are unchanged. - The positive outlook reflects the potential for an upgrade...

Research Update