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Quad-C Purchases Rainbow, Provider of Early Education Services

January 13, 2016

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Private equity firm Quad-C Management acquired Rainbow Early Education Holding LLC from Spire Capital Partners. According to Spire Capital, the transaction closed in June. Terms of the deal were not disclosed.

Rainbow, based in Troy, Michigan, provides early education services to more than 10,500 students, with 121 schools and before/after school programs in 12 states in the Midwest, Mid-Atlantic and Southeast U.S. The company was formed in 2010—when Spire acquired it-- with the merger of Rainbow Child Development, Little Pro's Academy Holdings and Mayberry Learning Center. Rainbow receives more than 90 percent of its revenue from private pay tuition. Rainbow’s customers are primarily from the communities near its schools, but it also provides corporate early education services to Chrysler, Ford, Whirlpool, Zimmer, GM, IBM, Bank of America, Fidelity, hospitals, universities other clients. Under Spire’s ownership, Rainbow opened or acquired 91 schools, more than tripling the school count while growing revenue by more than 400 percent, according to Spire.

Quad-C, based in Charlottesville, Virginia, invests in $75 million to $400 million companies in the business services, consumer, general industrial, healthcare, specialty distribution and transportation/logistics sectors. The firm has invested more than $2 billion in more than 40 companies since its 1989 start. Spire Capital of New York focuses on business services, information services, media, education and communications sectors, managing more than $900 million in investor commitments since its 2000 launch.

Recent M&A in the education space has included, in June, Blackboard Inc. agreeing to buy Higher One Holdings Inc. (NYSE: ONE), an education payment services provider. In May, Apollo Education Group Inc. (Nasdaq: APOL), owner of the for-profit University of Phoenix, agreed to a takeover by Apollo Global Management LLC (NYSE: APO), the Vistria Group LLC and other investors. Also in May, Becker Professional Education, a DeVry Education Group (NYSE: DV) subsidiary, announced plans to acquire the Association of Certified Anti-Money Laundering Specialists (ACAMS) from the Warburg Pincus PE firm. And in March, the education investment company Weld North Holdings, backed by Kohlberg Kravis Roberts & Co. (NYSE: KKR), acquired Performance Matters to expand into data and educational analytics technology market and to merge the company with Truenorthlogic.

Spire and Rainbow’s financial adviser on the transaction with Quad-C was Robert W. Baird & Co., with Dentons US LLP as legal counsel. Quad-C Management’s legal adviser was White & Case LLP.

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