Kohlberg Kravis Roberts & Co.
Type	Partnership
Founded	1976
Headquarters	New York, New York 7 offices in 5 countries
Key people	Henry Kravis, Senior Partner George R. Roberts, Senior Partner
Industry	Private Equity
Revenue	N/A
Net income	N/A
Website	Kohlberg Kravis Roberts & Co.

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. For partnership in cricket terminology see List of cricket terms A partnership is a type of Business entity in which partners Year 1976 ( MCMLXXVI) was a Leap year starting on Thursday (link will display full calendar of the Gregorian calendar. The City of New York Henry R Kravis (born January 6 1944 is an American Business Financier and Investor, notable for co-founding and heading a leading Private George R Roberts (1945- is an American financier and was one of the three original partners of Kohlberg Kravis Roberts & Co For other uses of this term see Industry (disambiguation An industry (from Latin industrius, "diligent industrious" In Finance, private equity is an Asset class consisting of equity Securities in operating companies that are not Publicly traded on In business revenue or revenues is Income that a company receives from its normal business activities usually from the sale of goods and services Net income is equal to the Income that a firm has after subtracting costs and Expenses from the total Revenue. A website (alternatively web site or Web site, a back-construction from the Proper noun World Wide Web) is a collection of Web pages The City of New York In Finance, private equity is an Asset class consisting of equity Securities in operating companies that are not Publicly traded on A leveraged buyout (or LBO, or highly-leveraged transaction (HLT or "bootstrap" transaction occurs when a Financial sponsor acquires a controlling interest 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. Year 1976 ( MCMLXXVI) was a Leap year starting on Thursday (link will display full calendar of the Gregorian calendar. Jerome Kohlberg Jr (born 1926 is a American businessman and billionaire and is an early pioneer in the Private equity and Leveraged buyout industries founding private Henry R Kravis (born January 6 1944 is an American Business Financier and Investor, notable for co-founding and heading a leading Private George R Roberts (1945- is an American financier and was one of the three original partners of Kohlberg Kravis Roberts & Co The Bear Stearns Companies Inc, based in New York City, was one of the largest global Investment banks and securities trading and brokerage

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. 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 A corporation is a separate legal entity usually used to conduct business 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. In Economics, capital or capital Goods or real capital refers to items of extensive value In Finance, a high yield bond ( non-investment grade bond, speculative grade bond or junk bond) is a bond that is rated below 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.

The bank loans and bonds used to finance the acquisition were collateralized by the tangible and intangible assets of the target company. In Business and Accounting, assets are everything owned by a person or company (all tangible and intangible property that can be converted into cash. 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 Finance, a high yield bond ( non-investment grade bond, speculative grade bond or junk bond) is a bond that is rated below In Finance, default occurs when a debtor has not met its legal obligations according to the debt contract e Bankruptcy is a legally declared inability or impairment of ability of an individual or organization to pay their Creditors Creditors may file a bankruptcy petition against In Finance, a high yield bond ( non-investment grade bond, speculative grade bond or junk bond) is a bond that is rated below "

Investment banks such as Drexel Burnham Lambert, led by Michael Milken, helped raise money for leveraged buyouts. Investment banks profit from companies and governments by raising money through issuing and selling Securities in the Capital markets (both equity and Drexel Burnham Lambert was a major Wall Street Investment banking firm which first rose to prominence and then was driven into bankruptcy in February 1990 by its Michael Robert Milken (born July 4, 1946 in Encino California) is a criminal American financier and philanthropist who almost single-handedly 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. Restructuring is the Corporate management term for the act of partially dismantling or otherwise reorganizing a company for the purpose of making it more profitable The new "leaner and more efficient" company could then be resold, often at significant return on investment. In Finance, rate of return ( ROR) also known as return on investment ( ROI) rate of profit or sometimes just return, is

Deals

KKR co-founders and cousins George R. Roberts (left) and Henry Kravis (right) on the cover of FORTUNE Magazine during the height of the 1980s buyout boom. George R Roberts (1945- is an American financier and was one of the three original partners of Kohlberg Kravis Roberts & Co Henry R Kravis (born January 6 1944 is an American Business Financier and Investor, notable for co-founding and heading a leading Private Fortune is a Global Business Magazine published by Time Inc's Fortune|Money Group

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. A leveraged buyout (or LBO, or highly-leveraged transaction (HLT or "bootstrap" transaction occurs when a Financial sponsor acquires a controlling interest RJR Nabisco Inc, was an American conglomerate formed in 1985 by the merger of Nabisco Brands and R 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. The Hospital Corporation of America ( 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. Barbarians at the Gate The Fall of RJR Nabisco is a 1990 book about the Leveraged buyout (LBO of RJR Nabisco, by investigative journalists Barbarians at the Gate is a made-for-TV movie based upon the book by Bryan Burrough and John Helyar, about the Leveraged buyout The initial equity injection by KKR was $1. 5bn, in July 1990 they were forced to put in an additional $1. 7 bn.

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 st 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. Regal Entertainment Group ( is the largest Movie theatre chain in North America, operating 6423 screens in 529 locations in 41 U Spalding is a sporting goods company started in Chicago by Albert Spalding in 1876 PRIMEDIA Inc,, formerly known as K-III Communications, is the #1 print and online publisher and distributor of advertising-supported consumer guides in the U Wise Foods Inc Wise Foods Inc is a private company based in Kennesaw Georgia that makes and sells snacks through retail food outlets in 15 eastern seaboard states as well as Shoppers Drug Mart Corporation ( is Canada 's largest Pharmacy chain with more than 1000 stores operating under the names Shoppers Drug Mart Yellow Pages Income Fund ( is a Canadian Income trust which is a publisher of printed and online Telephone directories and Classified advertising Wincor Nixdorf ( is a German Corporation that provides retail and retail banking hardware software and services MTU Aero Engines is Germany 's leading Aircraft engine manufacturer Energy Future Holdings Corporation is an Energy company headquartered in Energy Plaza in Dallas Texas. 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.

Recent activities

• On May 28, 2007, KKR announced it had withdrawn along with CVC from the consortium bidding for Australian retailer Coles Group. Events 585 BC - A Solar eclipse occurs as predicted by Greek philosopher and scientist Thales, while Alyattes is battling Year 2007 ( MMVII) was a Common year starting on Monday of the Gregorian calendar in the 21st century. CVC Capital Partners is one of the top 5 largest private equity firms in the world with approximately US$46 billion in funds focused on management buyouts For a topic outline on this subject see List of basic Australia topics. Coles Group Limited (formerly Coles Myer Limited was an Australian public company that operated numerous retail chains ^[1]
• On April 26, 2007, Harman International Industries announced it had entered an agreement to be acquired by KKR. Events 1467 - The miraculous image in Our Lady of Good Counsel appear in Genazzano, Italy. Year 2007 ( MMVII) was a Common year starting on Monday of the Gregorian calendar in the 21st century. Harman International Industries ( is an international audio and infotainment equipment company ^[2] This will place a debt of US-$ 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. Events 68 - Galba, Governor of Hispania, names himself legatus senatus populique Romani, breaking the line of Year 2007 ( MMVII) was a Common year starting on Monday of the Gregorian calendar in the 21st century. First Data Corporation is a Payment processing company based in Greenwood Village Colorado. The New York Stock Exchange ( NYSE) is a Stock exchange based in New York City. ^[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. Events 538 - Witiges, king of the Ostrogoths ends his siege of Rome and retreats to Ravenna, leaving Year 2007 ( MMVII) was a Common year starting on Monday of the Gregorian calendar in the 21st century. Nottingham ( is a city in the Ceremonial county of Nottinghamshire, England. The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom, the UK or Britain,is a Sovereign state located Alliance Boots Limited is a British based pharmaceuticals company operating as a high street retailer Pharmacist and pharmaceutical wholesaler This interest culminated in an escalated, and unopposed, April 24, 2007 takeover offer for $22. Events 1479 BC - Thutmose III ascends to the throne of Egypt, although power effectively shifts to Hatshepsut (according to Year 2007 ( MMVII) was a Common year starting on Monday of the Gregorian calendar in the 21st century. 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. Dollar General is a chain of Variety stores operating in 35 U The New York Stock Exchange ( NYSE) is a Stock exchange based in New York City. Tennessee ( is a state located in the Southern United States. 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 The S&P 500 is a Stock market index containing the stocks of 500 Large-Cap Corporations all of which are from the United States. 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. Events 747 BC - Epoch (origin of Ptolemy 's Nabonassar Era 364 - Valentinian I is proclaimed Year 2007 ( MMVII) was a Common year starting on Monday of the Gregorian calendar in the 21st century. TPG Capital (formerly Texas Pacific Group commonly referred to as "TPG" is a Private equity investment firm founded by David Bonderman, James Energy Future Holdings Corporation 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 acquires a controlling interest ^[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. Environmental policy is any (course of action deliberately taken (or not taken to manage human activities with a view to prevent reduce or mitigate harmful effects on nature and natural Greenhouse gases are gaseous constituents of the atmosphere bothnatural and anthropogenic that absorb and emit radiation at specific wavelengths within the spectrum of thermal infrared A fossil fuel power plant burns Fossil fuels such as Coal, Natural gas or Petroleum (oil to produce Electricity. Alternative energy is typically defined as coming from sources that do not deplete natural resources or harm. ^[9]
• On January 23, 2007 it was announced KKR would invest $700 million in Sun Microsystems. Events 393 - Roman Emperor Theodosius I proclaims his nine year old son Honorius co-emperor Year 2007 ( MMVII) was a Common year starting on Monday of the Gregorian calendar in the 21st century. Sun Microsystems Inc ( is a multinational vendor of Computers computer components Computer software, and Information technology services ^[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. Events 800 - Charlemagne judges the accusations against Pope Leo III in the Vatican Year 2006 ( MMVI) was a Common year starting on Sunday of the Gregorian calendar. TPG Capital (formerly Texas Pacific Group commonly referred to as "TPG" is a Private equity investment firm founded by David Bonderman, James The Home Depot ( is an American Retailer of Home improvement and construction products and services
• 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. Events 284 - Diocletian was chosen as Roman Emperor. 762 - Bögü Khan of the Uyghurs, 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. For a topic outline on this subject see List of basic Australia topics. Tarkett is one of the largest Manufacturers and distributors of resilient and hardwood floorings worldwide 4 billion ($1. 8 billion).
• Philips announced on August 3, 2006 that it was to sell a controlling 80. Koninklijke Philips Electronics NV ( Royal Philips Electronics Inc. Events 8 - Roman Empire General Tiberius defeats Dalmatians on the river Bathinus. Year 2006 ( MMVI) was a Common year starting on Sunday of the Gregorian calendar. 1% share of its semiconductor business for 6. 4 billion EUR to a consortium led by KKR, Silver Lake Partners and AlpInvest Partners. Silver Lake Partners is an American Private equity firm founded in 1999 and headquartered on Sand Hill Road in Menlo Park, California AlpInvest Partners, founded in 1999 is the exclusive manager of Private equity investments for two of the world's two largest pension funds Stichting Pensioenfonds The new company is called NXP Semiconductors. NXP (for Next eXPerience) Semiconductors is the name for the new Semiconductor company founded by Philips as announced by its CEO Frans Johannes Huth of KKR is a member of the supervisory board of NXP Semiconductors. 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 hire

(may 2006 : consortium to buy Nielsen (former VNU) ) (nov 2006 : buys French Yellow Pages)

• 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. The Handelsblatt is the leading German commercial economy newspaper published by the Verlagsgruppe Handelsblatt in Düsseldorf, a subsidiary of Georg Permira is an international Private equity firm based in the United Kingdom, headed by Damon Buffini. ProSiebenSat1 Media AG is a European Media conglomerate, operating commercial television premium pay channels radio stations and related print businesses
• In 2007, after being hit by the US credit markets chaos, KKR had to postpone a $1. Year 2007 ( MMVII) was a Common year starting on Monday of the Gregorian calendar in the 21st century. 25 billion public offering after investors showed little interest. ^[12]
• In September 2007, KKR Financial Holdings, an affiliate, was bailed-out for $270 million by Henry Kravis and George Roberts. On February 20, 2008 it was reportedly once again forced to delay the repayment of billions of dollars of commercial paper, and was beginning a new round of talks with creditors. ^[13]

Works about KKR

• Baker, George; Smith, George (1998). The New Financial Capitalists: KKR and the Creation of Corporate Value. New York: Cambridge University Press. Cambridge University Press (known colloquially as CUP is a Publisher given a Royal Charter by Henry VIII in 1534 ISBN 0-521-64260-4.  
• Anders, George (1992). Merchants of Debt: KKR and the Mortgaging of American Business. New York: BasicBooks. ISBN 0-465-04522-7.  
• Bartlett, Sarah (1991). The Money Machine: How KKR Manufactured Power & Profits. New York: Warner Books. Hachette Book Group USA (HBG is a Publishing company owned by Hachette Livre, the largest publishing company in France. ISBN 0-446-51608-2.  

Notable current and former employees

As of 1996, general partners (as opposed to associates) included Henry Kravis, George R. Roberts, Paul E. Year 1996 ( MCMXCVI) was a Leap year starting on Monday (link will display full 1996 Gregorian calendar) Henry R Kravis (born January 6 1944 is an American Business Financier and Investor, notable for co-founding and heading a leading Private George R Roberts (1945- is an American financier and was one of the three original partners of Kohlberg Kravis Roberts & Co Raether, Robert I. MacDonnell, Jose Gandarillas, 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. Saul Fox and Clifton S. Robbins are among the very few KKR partners who decided to leave the firm voluntarily. Fox started Fox Paine, a small but successful private equity firm, while Robbins joined General Atlantic Partners in 2000 and later founded Blue Harbour Group, L.P., a private investment firm based in Greenwich, CT. Gilhuly was the Managing Partner of KKR's European operations, based in London until November 2004, when he returned back to the United States, and jointly with Scott Stuart, launched SageView Capital. London ( ˈlʌndən is the capital and largest urban area in the United Kingdom. The United States of America —commonly referred to as the Johannes Huth, then a 44 year old (now 46) German national, was appointed head of the London office. Germany, officially the Federal Republic of Germany ( ˈbʊndəsʁepuˌbliːk ˈdɔʏtʃlant is a Country in Central Europe. London ( ˈlʌndən is the capital and largest urban area in the United Kingdom. Along with these partners and employees is one of the investors and share owner, Robert Rosner.

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)

See also

• Leveraged buyout
• Bootstrap
• Toys "R" Us
• KKR Financial (NYSE:KFN), a specialty finance company affiliated with Kohlberg Kravis Roberts

References

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/>. Year 2006 ( MMVI) was a Common year starting on Sunday of the Gregorian calendar. Events 338 BC - A Macedonian army led by Philip II defeated the combined forces of Athens and Thebes in the Retrieved on 7 July 2007