Bright Horizons is the largest provider of employer-sponsored childcare and back-up care. It has long-term contracts with large, established clients. Its employer-sponsored centers have high (over 95%) client retention. The premium brand and employer-sponsored model supports higher EBITDA margins as compared to its retail-based peers. The company has relatively high lease-adjusted leverage of about 4x. Although fixed costs are high, its employer-sponsored model provides the company with lower operating leverage and lower capital expenditure requirements relative to its retail-based peers. The stable ratings outlook reflects S&P Global Ratings' expectation that U.S.-based childcare center operator Bright Horizons Family Solutions LLC's revenue and EBITDA will grow at a high-single digit and low-double digit percentage rate, respectively, in 2017. We could lower the
