Buyout firm KKR files for $1.25 bln IPO
NEW YORK (Reuters) - KKR & Co. LP KKR.UL, the prominent U.S. buyout firm that pioneered the leveraged buyout industry, filed with regulators on Tuesday to raise up to $1.25 billion in an initial public offering.
The planned IPO follows last month's high-profile listing of rival Blackstone Group LP (BX.N), which raised $4.13 billion and ushered in a new era for an industry that has come to dominate financial markets worldwide by pursuing ever-larger takeovers and raising record amounts of capital.
Unlike the Blackstone IPO, however, KKR's owners are not selling any common units or receiving any net proceeds.
Blackstone's co-founders, Stephen Schwarzman, 60, and Peter Peterson, 81, earned a huge windfall from the Blackstone offering, pocketing more than $2.4 billion between them.
The relatively modest size of the offering and the timing of the announcement -- late on the eve of the U.S. Independence Day holiday -- suggested that KKR hopes that its IPO will be a lower key affair than Blackstone's, which attracted unwelcome attention from Congress.
Last year, KKR raised $5 billion for a publicly traded fund on the Euronext exchange -- KKR Private Equity Investors LP (KKR.AS).
Now, KKR plans to take a portion of its own general partnership public.
"It's not surprising. KKR had already tested the public markets. If this offering performs well then other firms are sure to follow," said Monte Brem, CEO of StepStone Group, a private equity consultant and asset manager.
Blackstone and KKR believe that the ability to offer public equity incentives for their staff stabilizes their talent base, at least in the short term, Brem added.
BUYOUT KINGS
Founded in 1976, KKR is led by founders Henry Kravis and George Roberts, both 63.
It has $53.4 billion in assets under management and earned $1.11 billion in 2006, according to its filing with the Securities and Exchange Commission.
KKR, as Kohlberg Kravis Roberts & Co., rose to prominence on the back of the debt-fueled leverage buyout craze of the 1980s.
The firm carried out its first $1 billion LBO in 1984 and was involved in dozens of deals building up to the decade-defining 1988-1989 buyout of RJR Nabisco -- at the time the largest ever buyout of a commercial firm -- which was immortalized in the bestseller "Barbarians at the Gate."
While long reigning as Wall Street's buyout king, Kravis also established himself in New York's high society and a patron of the arts who has an entire wing of the Metropolitan Museum of Art and named after him. Continued...
