Business Wire

NEW YORK --May 14, 1998--Vestar Capital Partners today announced completion of the recapitalization of child care provider La Petite Academy, Inc. and its parent, Vestar/LPA Investment Corporation, by an investor group led by Chase Capital Partners. Under the $283 million recapitalization, Vestar Capital Partners and La Petite's senior management will retain approximately 10% of the company.

The transaction was financed with a $40 million term loan facility and a $25 million revolving credit facility provided by Chase Manhattan Bank and NationsBank; a $145 million offering of 10 percent senior notes due 2008, underwritten by Chase Securities Inc. and NationsBanc Montgomery Securities LLC; $30 million in newly-issued preferred and $72 million in newly-issued common stock of La Petite Academy; plus $8 million of common equity rolled over by Vestar Capital Partners and La Petite's senior management.

La Petite Academy, one of the nation's pre-eminent providers of center-based child care and early education, employs approximately 13,000 people at more than 750 locations throughout the country. Based in Overland Park, Kansas, the company had revenues of approximately $310 million for the 12 months ended March, 1998. Vestar Capital acquired its majority stock in La Petite in 1993 for $150 million.

La Petite Chief Executive Officer James R. Kahl commented: "During the past five years, the counsel, support, and encouragement of our partners at Vestar Capital has enabled us to build an early childhood education and childcare company that, we believe, is second-to-none in the nation. Now, with our new partners at Chase Capital, and with management's continuing investment in the company, we envision an even brighter future for La Petite, setting new standards of quality and excellence for our rapidly-expanding industry." James P. Kelley, a Vestar managing director and chairman of La Petite, said: "La Petite is, today, a leader in the increasingly critical field of early education and child care, having grown significantly in the five years since Vestar acquired a majority stock interest. Under its new majority owner, Chase Capital, we feel confident that La Petite's growth will continue as the company moves ahead to new successes."

Steve P. Murray, a general partner at Chase Capital, added: "We see this transaction as a superb opportunity to become involved with a pre-eminent company in an exciting business sector with huge growth potential. Chase Capital expects to provide maximum support to La Petite as it continues its fast growth and profitable performance."

Vestar Capital Partners, with offices in New York and Denver, manages more than $1 billion of private equity capital. The firm focuses on management buyouts and recapitalizations and has completed over 25 such transactions during the past ten years. Previous Vestar investments include: Prestone Products Corporation, Celestial Seasonings, Inc., Westinghouse Air Brake Company, Remington Products Company, Sun Apparel, Inc., and Pyramid Communications, Inc.

Chase Capital Partners is a global private equity organization with over $5 billion under management. Chase Capital is a subsidiary of The Chase Manhattan Corporation, the largest bank holding company in the United States. Since its inception in 1984, Chase Capital has closed more than 550 individual transactions in North America, Europe, Asia and Latin America.