Private equity giant Kohlberg Kravis Roberts & Co. L.P. on Friday filed a registration statement with the U.S. Securities and Exchange Commission for an initial public offering of common units worth about $2.21 billion. The move takes the company a step closer to fulfilling its long-awaited plan of a listing on the New York Stock Exchange. The company plans to list its common shares under the symbol "KKR".
Kohlberg Kravis Roberts & Co. or KKR said it is registering the distribution of 204.90 million common units representing limited partner interests in its business to holders of common units of KKR & Co. Guernsey L.P (KPEQF.PK). The proposed maximum aggregate offering price is $10.80, the average of the bid and asked price per share of the common units on Euronext Amsterdam on March 5, 2010.
KKR Guernsey is a Guernsey limited partnership whose common units are currently listed on Euronext Amsterdam. In October 2009, KKR merged with its publicly traded European fund to gain a listing in Europe and anticipating a listing on the New York Stock Exchange in 2010.
KKR said that following the distribution of its common units to holders of KKR Guernsey units, each KKR Guernsey unitholder will receive one of its common units for each unit of KKR Guernsey held by them when the U.S. listing becomes effective.
Following the distribution, KKR Guernsey unitholders will own 30% of KKR. Concurrent with such distribution, the company will list its common units on the New York Stock Exchange under the symbol "KKR".
The remaining 70% interest in the private equity firm is held by its principals, who own 478.11 million common units through KKR Holdings L.P. On a fully diluted basis, the company has an aggregate of 683.01 million common units outstanding.
In February 2010, KKR had said that a U.S. listing was forthcoming while reporting its financial results for the fourth quarter. The company had filed for an IPO in July 2007 at the height of the buyout boom and less than two weeks after the initial public offering of rival private equity firm Blackstone Group (BX). However, the onset of the credit crunch and the shutdown of the IPO market dampened the company's prospects and the flotation was finally called off.
KKR was founded in 1976 by cousins Henry Kravis and George Roberts, who previously worked together at Bear Stearns. Since its founding, the company has completed several landmark transactions, including the 1989 leveraged buyout of conglomerate RJR Nabisco Inc. and the 2007 buyout of TXU.
Reporting its first annual results as a public company listed in Amsterdam, KKR in late February reported economic net income or ENI for the fourth quarter of $515.3 million, and pro forma ENI of $1.95 billion for the full year. The company also said it would pay its first ever dividend of $0.08 per share for the fourth quarter. KKR said it had uncalled commitments to its investment funds of $14.5 billion as of December 31, 2009, implying the amount it has in balance to spend on new deals.
As of December 31, 2009, KKR's assets under management were $52.2 billion, up from $15.1 billion as of December 31, 2004, representing a compound annual growth rate of 28.1%. Among the company's holdings are discount retailer Dollar General Corp. (DG) and hospital chain HCA Inc., two of KKR's most successful private-equity deals.
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