Lazard Freres Unit Makes $16 Million Investment in ChildrenFirst, Pioneer of Corporate Backup Child Care

Business Wire, March 25, 1999

NEW YORK--(BUSINESS WIRE)--March 25, 1999--Lazard Freres & Co. LLC announced that its private equity investing affiliate, Lazard Capital Partners, has closed a $16 million investment in ChildrenFirst, Inc., a leader in the burgeoning industry of corporate backup child care. Founded in 1992, ChildrenFirst has pioneered high quality, employer-sponsored backup child care and education for working parents to use when their regular child care arrangements fall through.

Thomas Lynch, co-head of Lazard Capital Partners, noted that backup child care -- the fastest growing segment in the education market -- has been definitively proven to provide a positive return on investment for companies by lowering absenteeism and attrition and enhancing recruiting. "The economics of backup child care are extremely compelling," said Lynch. "While investment activity within the segment is strong, we stood back and reviewed the industry, then waited patiently to find the right company. ChildrenFirst was the clear choice. Their service is unparalleled. Lazard is very fortunate to get in on the ground floor and support the growth of the founder and leader of this industry."

ChildrenFirst designs, develops and operates backup child care centers that serve children from ages 12 weeks through 12 years. With 15 centers in operation and five centers in development, ChildrenFirst has more than 150 corporate clients, including most of Wall Street's investment banks and law firms, and companies such as American Express, Arco, Avon Products, Chevron, Conde Nast, Deloitte & Touche, Gillette and Sara Lee. The Lazard Capital Partners investment will be used to recapitalize the company and provide growth equity for ChildrenFirst to open new centers and expand its geographical presence.

"For a growing company at our stage, we had very specific requirements for the right kind of financial partner," said Rosemary Jordano, founder and CEO of ChildrenFirst. "As a ChildrenFirst client, Lazard Freres knows from experience the caliber of service we provide. They understand the complexities of operating in a zero-defect business, and they share our vision that each child is unique, precious, and unrepeatable."

With working mothers averaging eight days away from work each year due to child care emergencies, corporate clients recognize that ChildrenFirst's exceptional service offers a significant means of reducing employee absenteeism. The staff at ChildrenFirst are trained and dedicated early childhood professionals, half of whom have master's degrees. The centers offer state-of-the-art educational materials and equipment and sophisticated security systems. In ongoing surveys of parents, 98% state that they are 'extremely satisfied' with the service provided by ChildrenFirst. ChildrenFirst has retained 99% of clients since inception.

ChildrenFirst centers are located in New York City, Boston, Chicago, Jersey City, Minneapolis, Los Angeles, and San Francisco.

Lazard Capital Partners is the private equity investing affiliate of Lazard Freres & Co. LLC and manages a $130 million fund of committed capital. Lazard Capital Partners strategy is to harness all of the resources and capabilities of its global investment bank affiliate to create value for its middle market growth company investments. Lazard Capital Partners, founded in 1997, has made a total of eight investments in five different companies to date.

Lazard Freres & Co. LLC provides domestic and international financial advisory services and global transaction execution to corporations, partnerships, institutions, governments and individuals. Its services include mergers and acquisitions, capital markets execution, asset management, and real estate investment banking. It is one of three Lazard Houses, along with Lazard Freres & Cie in Paris and Lazard Brothers and Co. Limited in London.