KEY POINTS:
Kohlberg Kravis Roberts, one of the world's oldest and largest private equity firms, is resurrecting its plan to float on the New York Stock Exchange, despite the ravaging given to financial stocks since the credit crisis began.
A long private equity industry boom came to an abrupt halt a year ago, just as KKR was planning to follow its arch-rival Blackstone in going public.
But the company has revised its plans and is now expecting to join the public markets around the end of this year, in a transaction that values it at more than US$10 billion ($13.4 billion).
As part of the deal, KKR intends to acquire KKR Private Equity Investors (KPE), the affiliated investment vehicle it listed in Amsterdam two years ago and whose shares have languished well below the value of its assets - to the enduring frustration of founder Henry Kravis.
None of the partners is planning to sell shares in the flotation. The business is headed by Kravis and George Roberts, two cousins who had been rising stars at the investment bank Bear Stearns in the 1970s, Kravis under the tutelage of senior corporate financier Jerome Kohlberg.
The three men founded KKR in 1976 and pioneered the leveraged buyout, using large amounts of debt financing to buy major companies.
By floating on the public markets, KKR will gain access to a potential new source of capital at a time when raising funds in the debt markets is more expensive and complicated.
A year ago, KKR was riding high on the boom in leveraged buyouts, spending US$29 billion on the credit card processing firm First Data and, with others, US$45 billion on the energy group TXU. This year it has not taken a single US company private.
KKR's portfolio of companies ranges from Toys R Us to Pages Jeunes, the French yellow pages. Last year, it also won an £11.1 billion ($29.7 billion) bidding war for London-listed Alliance Boots, the first FTSE 100 company ever to fall into private equity hands.
Last September, KKR's equity investments were valued at more than US$86 billion.
- INDEPENDENT
