Kohlberg Kravis Roberts & Co. (KKR) plans to list on the New York Stock Exchange later this year, not in a traditional IPO, but in a transaction that involves buying its publicly listed Amsterdam investment fund.
That vehicle would de-list in Amsterdam, with unit-holders receiving newly issued shares in a NYSE-listed KKR. The firm itself would not issue any new shares, which means that it would hold about a 79% equity stake in the merged entity.
KKR could have a valuation in the range of $15 billion to $19 billion when combined with the Amsterdam fund it plans to buy, says one source familiar with KKR.
The transaction is expected to go through in the fourth quarter, sources said, meaning KKR should be publicly traded on the NYSE before the end of 2008.
Going public would allow the firm to have a more permanent capital base, use stock to retain and attract staff and have a currency to make acquisitions.
The move in many ways, is not surprising. KKR indicated its interest in going public in June 2007 when it filed an S-1 to raise $1.25 billion. A credit crunch and continued weakening of the stock of publicly traded private equity firm The Blackstone Group, impacted those plans.
The private equity industry has been especially hard hit by the credit turmoil, having struggled to put capital to work amid a dearth of financing for deals.
However, KKR has ramped up speculation in recent weeks by re-organizing its back-office, and hiring William Sonneborn to help further develop its asset management business.
Founded in 1976, KKR rose to prominence during 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, which at the time was the largest buyout of a commercial company. The RJR Nabisco deal was later immortalized in the “Barbarians at the Gate: The Fall of RJR Nabisco.”
Reuters reporting contributed to this story.