Leveraged buyouts king Kohlberg Kravis Roberts (KKR), says Reuters, has finally detailed its listing plans — it will do so on the New York Stock Exchange later this year under the ticker ‘KKR’. The New York-headquartered firm will go public via a buyout of its Amsterdam-listed fund, KKR Private Equity Investors (KPE), which will be delisted from Euronext. The deal is expected to be completed in December and its valuation is pegged at $15-19 billion. More details on the proposed listing and KKR’s financials at Bloomberg.
At $60.8 billion in assets under management as on June 30, 2008, KKR is the world’s third-largest private equity firm after Blackstone and Carlyle, in that order.
KKR in India: There has been some talk about KKR setting up an office in India, but nothing has materialized yet. It does have an on-ground presence in Asia in the form on an investment team headquartered in Hong Kong. In India, KKR has done one deal. In April 2006 it acquired an 85 per cent stake in the India-based software development and solutions business of Flextronics International for $900 million — press release. This was India’s first brush with leveraged buyouts, though the deal was actually executed in the US. Still, since the assets being acquired were in India and were, in fact, the reason for doing the deal, it qualifies as India’s first and largest private equity-backed leveraged buyout transaction.
I sometimes wonder why the investing community accept PE firms’ IPOs and later buy the stock from secondary markets. Major portion of these PE firm’s investments are in private companies, which cannot be valued accurately. And add to that the secrecy shrouding operations of most PE firms and it seems the lure for investors is almost a devilish desire to see through the seductive veil of secrecy rather than economic prudence. Interestingly, here is an excerpt from Blackstone (BX)’s IPO prospectus – “It is our intention to preserve the elements of our culture that have contributed to our success as a privately owned firm”. Blackstone doesn’t even have annual shareholder meetings!