PLANS BY Kohlberg Kravis Roberts (KKR) to merge with a struggling affiliate and then list on the New York Stock Exchange will help the giant buyout firm expand at an ideal time for making acquisitions, according to KKR executives.
KKR, one of the world's most powerful private equity firms, plans to brave the turbulent equity markets and list on the NYSE this year in a deal that a source familiar with the situation has said would value it at $12 billion to $15 billion.
KKR is aiming to go public through a complicated transaction that involves buying KKR Private Equity Partners (KPE), its publicly listed Amsterdam investment fund, delisting it from Amsterdam and relisting the new company in New York. The move comes amid a drought for the private equity industry's traditional business of leveraged buyouts.
The mega-buyouts of the past few years dried up abruptly last summer when the credit crunch shut off the cheap financing that fed the multibillion dollar deals.
KKR co-founder George Roberts yesterday cited several factors for the timing of the deal. He said KKR was disappointed with KPE's stock price and decided to unlock shareholder value through this deal.
KKR had "tremendous confidence" in its portfolio of companies and believed that owning a bigger portion of those companies at this time provided "significant growth opportunities to KKR and KPE unit holders in the coming years".
Many analysts said the timing of the deal implied that the market was yet to bottom out.
