Kohlberg Kravis Roberts & Co (commonly referred to as KKR) is a New York City-based private equity firm that focuses primarily on late-stage leveraged buyouts. It was founded in 1976 by Jerome Kohlberg, Jr., and cousins Henry Kravis and George R. Roberts, all of whom had previously worked together at Bear Stearns. From [1] This work is copyrighted. ... New York, New York and NYC redirect here. ... Private equity is a broad term that refers to any type of equity investment in an asset in which the equity is not freely tradable on a public stock market. ... A leveraged buyout (or LBO, or highly-leveraged transaction (HLT), or bootstrap transaction) occurs when a financial sponsor gains control of a majority of a target companys equity through the use of borrowed money or debt. ... Year 1976 Pick up sticks(MCMLXXVI) was a leap year starting on Thursday (link will display full calendar) of the Gregorian calendar. ... Jerome Kohlberg, Jr. ... Henry R. Kravis (born January 6, 1944 in Tulsa, Oklahoma, United States) is an American business financier and investor, notable for co-founding and heading the leading private equity firm, Kohlberg Kravis Roberts & Co. ... George R. Roberts (1945-) is a financier and was one of the founders of Kohlberg Kravis Roberts & Co. ... The Bear Stearns Companies, Inc. ...

The KKR approach

KKR specializes in leveraged buyouts (LBO) and suggest that they developed the principle of creating a series of limited partnerships to acquire various corporations which they deemed to be underperforming. In most cases, KKR (often with management) financed up to twenty-five percent of the acquisition price with its own capital and borrowed the remainder through bank loans and by issuing high-yield bonds, while having a more favorable approach towards the latter. KKR would often ensure that the target company's management retained an equity interest to create a personal financial incentive for them to approve of the takeover and work diligently towards the success of the investment. A limited partnership is a form of partnership similar to a general partnership, except that in addition to one or more general partners (GPs), there are one or more limited partners (LPs). ... For other uses, see Corporation (disambiguation). ... Capital has a number of related meanings in economics, finance and accounting. ... High yield debt (non-investment grade or junk bond) is a business term referring to a corporate debt instrument, usually a bond, that has a higher yield (compared to investment grade debt) because of a high perceived credit risk (default risk). ... This article or section is in need of attention from an expert on the subject. ...

The bank loans and bonds used to finance the acquisition were collateralized by the tangible and intangible assets of the target company. Because the bondholders only received their interest and principal payments after the banks were repaid, these bonds were deemed riskier than investment grade bonds in the event of default or bankruptcy, and popularly became known as "junk bonds." In business and accounting an asset is anything owned, whether in possession or by right to take possession, by a person or a group acting together, e. ... High yield debt (non-investment grade or junk bond) is a business term referring to a corporate debt instrument, usually a bond, that has a higher yield (compared to investment grade debt) because of a high perceived credit risk (default risk). ... In finance, default occurs when a debtor has not met its legal obligations according to the debt contract, e. ... Notice of closure stuck on the door of a computer store the day after its parent company, Granville Technology Group Ltd, declared bankruptcy (strictly, put into administration—see text) in the United Kingdom. ... High yield debt (non-investment grade or junk bond) is a business term referring to a corporate debt instrument, usually a bond, that has a higher yield (compared to investment grade debt) because of a high perceived credit risk (default risk). ...

Investment banks such as Drexel Burnham Lambert, led by Michael Milken, helped raise money for leveraged buyouts. Once the targeted company was acquired, KKR would help restructure the company, usually selling off certain underperforming assets and implementing a series of cost-cutting measures. The new "leaner and more efficient" company could then be resold, often at significant return on investment. To meet Wikipedias quality standards, this article or section may require cleanup. ... Drexel Burnham Lambert was one of the most profitable Wall Street investment banking firms during the late 1970s and most of the 1980s. ... Michael Robert Milken, born July 4, 1946, in Encino, California, is an American financier best known as the Junk Bond King of 1980s era Wall Street. ... Restructuring is the corporate management term for the act of partially dismantling or otherwise reorganizing a company for the purpose of making it more efficient and therefore more profitable. ... In finance, the return on investment (ROI) or just return is a calculation used to determine whether a proposed investment is wise, and how well it will repay the investor. ...

Deals

After the 1987 resignation of Jerome Kohlberg at age 61 (he later founded his own private equity firm, Kohlberg & Co.), Henry Kravis succeeded him as senior partner. Under Kravis and Roberts, the firm was responsible for the 1988 leveraged buyout of RJR Nabisco. At a cost of $31.4 billion including net debt of $6.3 billion, it was then the highest price ever paid for a commercial enterprise, financed with a combination of bank debt, high yield bonds, and a $3.6 billion equity investment by KKR. The deal was only rivaled in July 2006 by the $33 billion buyout of U.S. hospital operator Hospital Corporation of America, in which KKR also participated, though the RJR deal was larger, adjusted for inflation. A leveraged buyout (or LBO, or highly-leveraged transaction (HLT), or bootstrap transaction) occurs when a financial sponsor gains control of a majority of a target companys equity through the use of borrowed money or debt. ... RJR Nabisco, Inc. ... The Hospital Corporation of America (HCA) NYSE: HCA is the largest private operator of health care facilities in the world. ...

The publicity surrounding the RJR Nabisco buyout led to a book, Barbarians at the Gate: The Fall of RJR Nabisco and subsequent film. The initial equity injection by KKR was $1.5bn, in July 1990 they were forced to put in an additional $1.7 bn. Barbarians at the Gate: The Fall of RJR Nabisco (ISBN 0060161728) is a book by Bryan Burrough and John Helyar, about the leveraged buyout (LBO) of RJR Nabisco. ... Barbarians at the Gate is a made-for-TV movie based upon the book by Bryan Burrough and John Helyar, about the leveraged buyout (LBO) of RJR Nabisco. ...

The RJR transaction benefited many of the parties involved. Investment bankers and lawyers who advised KKR walked away with over $1 billion in fees, and Henry Kravis and George Roberts attracted unprecedented amount of publicity that turned the cousins into instant celebrities.

However, KKR's investors, mainly public and private pension funds who provided KKR with the capital for this buyout, did not do so well. After over fifteen years of efforts that included taking RJR public, as well as exchanging shares of RJR for the ownership of Borden Foods, formerly chemicals-to-pasta conglomerate, KKR finally exited the investment in 2005, selling the remnants of its stake in Borden's Chemical division to Apollo group at a significant loss.

In the recent years, KKR's track record has been mixed. Heavy losses on such investments as Regal Entertainment Group, Spalding, and Primedia were offset by successes in Willis Group, Wise Foods, Inc., Shoppers Drug Mart, Bell Canada Yellow Pages, Wincor Nixdorf, MTU Aero Engines and TXU, among others. KKR opened a successful office in London led by Johannes Huth, but it lost many of its original partners, including Saul Fox, Ted Ammon, Ned Gilhuly, Mike Tokarz and Scott Stuart who were instrumental in establishing KKR's reputation and track record in the 1980s. KKR remains tightly controlled by Kravis and Roberts. The issue of succession will likely continue to leave a large dark cloud over KKR's future. Regal Entertainment Group (NYSE: RGC) is North Americas largest movie theatre chain, operating 6,273 screens in 584 locations in 40 U.S. states. ... Spalding is a sporting goods company started in Chicago by A.G. Spalding in 1876. ... Primedia Logo Primedia Inc. ... The WISE Owl eye logo Wise Foods, Inc. ... Shoppers Drug Mart Corporation TSX: SC is Canadas largest pharmacy chain with almost 1000 stores operating under the names Shoppers Drug Mart across Canada (outside of Quebec) and Pharmaprix in Quebec. ... Yellow Pages Income Fund TSX: YLO.UN is a Canadian income trust which is a publisher of printed and online telephone directories and classified advertising through its subsidiaries Yellow Pages Group and Trader Corporation. ... Wincor Nixdorf (FWB:WIN) is a corporation that provides retail and retail banking hardware, software, and services. ... MTU Aero Engines, Germanys leading aircraft engine manufacturer, develops, manufactures and provides service support for aircraft engines, military and civil alike. ... TXU (formerly TU Electric) NYSE: TXU is an energy company headquartered in Energy Plaza in Dallas, Texas. ...

Recent activities

• On May 28, 2007, KKR announced it had withdrawn along with CVC from the consortium bidding for Australian retailer Coles Group.^[1]
• On April 26, 2007, Harman International Industries announced it had entered an agreement to be acquired by KKR. ^[2] This will place a debt of US-$ 4.7 billion on Harman.^[3] For comparison: Sales were $ 3.5 billion, operating margin $ 382 mio. Total assets were $ 2.5 billion in FY 2007. ^[4]
• On April 2, 2007 it was announced that KKR entered an agreement to acquire First Data(NYSE: FDC), one of the nation’s first and largest credit-card processing companies. ^[5]
• On March 12, 2007 KKR announced the interest in the Nottingham, UK based retail and chemical company Alliance Boots, owner of Boots, the famous retail store on England's High Street. This interest culminated in an escalated, and unopposed, April 24, 2007 takeover offer for $22.2B.^[6] That same March day, KKR announced an effort to take over Dollar General (NYSE: DG), a Tennessee-based operator of variety stores that is currently listed on the S&P 500. KKR intends to take the company private.^[7] On July 25, it was widely reported that the banks which underwrote to syndicate the debt for this deal have been having difficulty getting buyers.
• On February 26, 2007 Texas Pacific Group and KKR acquire TXU for about $45 billion, including debt, in the largest-ever leveraged buyout.^[8] The deal is also notable for a drastic change in environmental policy for the energy giant, in terms of its carbon emissions from coal power plants and funding alternative energy.^[9]
• On January 23, 2007 it was announced KKR would invest $700 million in Sun Microsystems. ^[10]
• On December 1, 2006 it was reported that KKR and Texas Pacific Group have been exploring the possibility of a record $100 billion leveraged buyout of the nation's second-largest retailer Home Depot.
• On November 20, 2006 it was announced KKR would form a AUD4 billion partnership with the Seven Network of Australia ^[11]
• In October 2006, KKR bought a 50% stake in Tarkett, a France-based distributor of flooring products, in a deal valued at about €1.4 billion ($1.8 billion).
• Philips announced on August 3, 2006 that it was to sell a controlling 80.1% share of its semiconductor business for 6.4 billion EUR to a consortium led by KKR, Silver Lake Partners and AlpInvest Partners. The new company is called NXP Semiconductors. Johannes Huth of KKR is a member of the supervisory board of NXP Semiconductors.

(may 2006 : consortium to buy Nielsen (former VNU) ) (nov 2006 : buys French Yellow Pages) is the 148th day of the year (149th in leap years) in the Gregorian calendar. ... Year 2007 (MMVII) is the current year, a common year starting on Monday of the Gregorian calendar and the AD/CE era in the 21st century. ... CVC Capital Partners is a European private equity firm. ... Coles Group Limited (formerly Coles Myer Limited) is an Australian public company which operates numerous retail chains. ... is the 116th day of the year (117th in leap years) in the Gregorian calendar. ... Year 2007 (MMVII) is the current year, a common year starting on Monday of the Gregorian calendar and the AD/CE era in the 21st century. ... Harman International Industries is an international audio equipment company. ... is the 92nd day of the year (93rd in leap years) in the Gregorian calendar. ... Year 2007 (MMVII) is the current year, a common year starting on Monday of the Gregorian calendar and the AD/CE era in the 21st century. ... First Data Corporation (NYSE: FDC) is a payment processing company based in Greenwood Village, Colorado. ... The New York Stock Exchange (NYSE), nicknamed the Big Board, is a New York City-based stock exchange. ... is the 71st day of the year (72nd in leap years) in the Gregorian calendar. ... Year 2007 (MMVII) is the current year, a common year starting on Monday of the Gregorian calendar and the AD/CE era in the 21st century. ... For other uses, see Nottingham (disambiguation). ... Alliance Boots LTD is a British based pharmaceuticals company, operating as a high street retailer, pharmacist and pharmaceuticals wholesaler. ... Boots is the name of at least five different albums and singles: Boots by Nancy Sinatra (1966) Boots by Mighty Gabby (1984) Boots by Condemned Eighty Four (2001) Boots by KMFDM (2002) Boots by Noe Venable (2003) It is also the name of a large chain of chemists in the... is the 114th day of the year (115th in leap years) in the Gregorian calendar. ... Year 2007 (MMVII) is the current year, a common year starting on Monday of the Gregorian calendar and the AD/CE era in the 21st century. ... Dollar General (NYSE: DG) is a chain of limited-selection consumable retail stores operating in 30 U.S. states. ... The New York Stock Exchange (NYSE), nicknamed the Big Board, is a New York City-based stock exchange. ... This article is about the U.S. state of Tennessee. ... A 99 cent store A variety store or price-point retailer is a retail store that sells inexpensive items, usually with a single price point for all items in the store. ... The S&P 500 is an index containing the stocks of 500 Large-Cap corporations, most of which are American. ... is the 57th day of the year in the Gregorian calendar. ... Year 2007 (MMVII) is the current year, a common year starting on Monday of the Gregorian calendar and the AD/CE era in the 21st century. ... The Texas Pacific Group (commonly referred as TPG) is a private equity investment firm founded by David Bonderman, James Coulter and William Price in 1993. ... TXU (formerly TU Electric) NYSE: TXU is an energy company headquartered in Energy Plaza in Dallas, Texas. ... A leveraged buyout (or LBO, or highly-leveraged transaction (HLT), or bootstrap transaction) occurs when a financial sponsor gains control of a majority of a target companys equity through the use of borrowed money or debt. ... Environmental policy refers to the laws, regulations, and other policy mechanisms concerning environmental issues and sustainability. ... Top: Increasing atmospheric CO2 levels as measured in the atmosphere and ice cores. ... Mohave Generating Station, a 1,580 MW coal power plant near Laughlin, Nevada A fossil fuel power plant is an energy conversion center that burns fossil fuels to produce electricity, designed on a large scale for continuous operation. ... Alternative energy is energy derived from sources that do not harm the environment or deplete the Earths natural resources. ... is the 23rd day of the year in the Gregorian calendar. ... Year 2007 (MMVII) is the current year, a common year starting on Monday of the Gregorian calendar and the AD/CE era in the 21st century. ... Sun Microsystems, Inc. ... is the 335th day of the year (336th in leap years) in the Gregorian calendar. ... Year 2006 (MMVI) was a common year starting on Sunday of the Gregorian calendar. ... The Texas Pacific Group (commonly referred as TPG) is a private equity investment firm founded by David Bonderman, James Coulter and William Price in 1993. ... The Home Depot (NYSE: HD) is an American retailer of home improvement and construction products and services. ... is the 324th day of the year (325th in leap years) in the Gregorian calendar. ... Year 2006 (MMVI) was a common year starting on Sunday of the Gregorian calendar. ... The Seven Network is an Australian television network, owned by the Seven Media Group. ... Tarkett is today one of the largest producers and distributors of resilient floorings worldwide. ... Philips HQ in Amsterdam Koninklijke Philips Electronics N.V. (Royal Philips Electronics N.V.), usually known as Philips, (Euronext: PHIA, NYSE: PHG) is one of the largest electronics companies in the world, founded and headquartered in the Netherlands. ... is the 215th day of the year (216th in leap years) in the Gregorian calendar. ... Year 2006 (MMVI) was a common year starting on Sunday of the Gregorian calendar. ... Silver Lake Partners is a notable American private equity firm founded in 1999 and headquartered on Sand Hill Road in Menlo Park, California. ... For other uses of NXP, see NXP (disambiguation). ... A Supervisory board is a group of individuals chosen by the stockholders of a company to promote their interests through the governance of the company and to supervise and control the executive directors and CEO. Germany In Germany the Aufsichtsrat or Supervisory Board is composed of 11 non-executive directors...

• In 2005 KKR bought the German company Duales System Deutschland, which has a monopoly on recycling the packaging of consumer goods.
• According to Germany's Handelsblatt, KKR and financial investor Permira bought Germany's second largest private television chain ProSiebenSat.1 Media.
• In 2007, after being hit by the US credit markets chaos, KKR had to postpone a $1.25 billion public offering after investors showed little interest.^[12]

The Handelsblatt is the leading German commercial economy newspaper published by the Verlagsgruppe Handelsblatt in Düsseldorf, a subsidiary of Georg von Holtzbrinck Publishing Group. ... Permira is an international, private equity firm based in the United Kingdom. ... ProSiebenSat. ... Year 2007 (MMVII) is the current year, a common year starting on Monday of the Gregorian calendar and the AD/CE era in the 21st century. ...

Notable current and former employees

As of 1996, general partners (as opposed to associates) included Henry Kravis, George R. Roberts, Paul E. Raether, Robert I. MacDonnell, Michael W. Michelson, Saul A. Fox, James H. Greene, Jr., Michael T. Tokarz, Clifton S. Robbins, Scott M. Stuart, Perry Golkin and Edward A. Gilhuly. Gilhuly was the Managing Partner of KKR's European operations, based in London until November 2004, when he returned back to the United States. Johannes Huth, then a 44 year old (now 46) German national, was appointed head of the London office. Along with these partners and employees is one of the investors and share owner, Robert Rosner. Year 1996 (MCMXCVI) was a leap year starting on Monday (link will display full 1996 Gregorian calendar). ... Henry R. Kravis (born January 6, 1944 in Tulsa, Oklahoma, United States) is an American business financier and investor, notable for co-founding and heading the leading private equity firm, Kohlberg Kravis Roberts & Co. ... George R. Roberts (1945-) is a financier and was one of the founders of Kohlberg Kravis Roberts & Co. ... For other uses, see Europe (disambiguation). ... This article is about the capital of England and the United Kingdom. ... This article is about the capital of England and the United Kingdom. ...

Business

• Ted Ammon - investment banker
• Paul Hazen - chairman and CEO of Wells Fargo (?-2001)
• Clive Hollick, Baron Hollick - CEO of United News and Media (1996-2005)

Theodore Robert Ammon (August 30, 1949 in Pittsburgh, Pennsylvania - October 20, 2001 in East Hampton, New York) was an American financier and Investment Banker. ... This page is a candidate for speedy deletion. ... An older Wells Fargo branch, located in Berkeley, California Wells Fargos corporate headquarters and main branch Wells Fargo & Co. ... The Right Honourable Clive Richard Hollick, Baron Hollick (born 19 May 1945) is a British businessman with media interests. ... UBM Logo United Business Media provides business information services principally to the technology, healthcare, media, automotive and financial services industries. ...

See also

• Leveraged buyout
• Bootstrap
• Toys "R" Us
• KKR Financial KKR's publicly traded REIT (NYSE:KFN)

A leveraged buyout (or LBO, or highly-leveraged transaction (HLT), or bootstrap transaction) occurs when a financial sponsor gains control of a majority of a target companys equity through the use of borrowed money or debt. ... A leveraged buyout (or LBO, or highly-leveraged transaction (HLT), or bootstrap transaction) occurs when a financial sponsor gains control of a majority of a target companys equity through the use of borrowed money or debt. ... Toys R Us (currently typeset as Toys Я Us in the logo) is a toy store chain based in the United States, Canada, Australia, the Netherlands, South Africa, Hong Kong and the United Kingdom. ... A Real Estate Investment Trust or REIT (rhymes with meet) is a specialized form of investment company in the United States that effectively allows its (usually public) investors to share the ownership of a group of real estate properties. ...

References

For other uses, see BBC (disambiguation). ... Year 2007 (MMVII) is the current year, a common year starting on Monday of the Gregorian calendar and the AD/CE era in the 21st century. ... is the 71st day of the year (72nd in leap years) in the Gregorian calendar. ... Reuters Group plc (LSE: RTR and NASDAQ: RTRSY); pronounced is known as a financial market data provider and a news service that provides reports from around the world to newspapers and broadcasters. ... The Houston Chronicle is a daily newspaper in Houston, Texas, United States. ...

External links

• KKR official website
• KKR's latest acquisition of Flextronics Software
• KKR in deal to buy Philips Semiconductors reported on 2006-08-02
• Yahoo! - Kohlberg Kravis Roberts & Co. company profile
• FT.com / Industries / Basic industries – "KKR set to buy Masonite for C$3.1bn"
• WSJ.com / US Business News – "What's Next for Toys 'R' Us?"
• Gross, Daniel (2007-07-05), "Has Henry Kravis gone soft?", Slate, <http://www.slate.com/id/2169859/>. Retrieved on 2007-07-07