The storied New York firm, co-founded by “buyout king” Henry Kravis, had been planning to follow rival Blackstone Group to become a publicly-traded company for two years, but its plans were knocked down by market turmoil.
KKR’s complicated deal to become a publicly traded entity involves combining with
The company’s stock ticker will be changed to KKR from its current KPE.
“Our mission is to create attractive returns for our investors,” co-founders Henry Kravis and George Roberts said in a statement. “This transaction is a milestone that will enhance this mission and provide capital to grow our firm.”
KKR is not issuing new shares under the deal and KKR executives are not selling any interests.
KKR originally announced plans to list on the NYSE via a traditional initial public offering in July 2007, a month after Blackstone went public and just before the markets started to tumble. Blackstone’s shares are currently trading at around half their $31 a share IPO price.
KKR later proposed a more complex method of going public, by combining with KPE. In June, it formally withdrew the proposed New York IPO plan, but kept the door open for such a move, saying it had the ability to seek a listing in the future.
It has said in recent filings that, after the pair combine, either KKR or KPE has the right to require the other to use “reasonable best efforts” to list the combined business in the United States.
A move to a New York listing will likely be in the spring of 2010, a source familiar with the situation previously told Reuters.
On Sept. 29, KKR appointed its first head of investor relations as it readied itself to become publicly listed.
The transaction is expected to be a nonevent for the stock, as the market has been aware of the transaction’s terms for some time, analyst Michael Kim at Sandler O’Neill said.
“Since the time that they announced the revised terms and indicated a high likelihood that the reverse merger would get approved, I think the stock (KPE) has essentially traded as a proxy for the overall KKR,” said Kim.
KPE’s shares have risen more than 50 percent since the revised terms of the deal were announced on July 20. The shares closed at $9.35 the day before this deal was announced.
KKR has investments in numerous household names such as Toys R Us Inc., mattress maker Sealy Corp. and asset manager Legg Mason Inc.