KKR Completes Reverse Merger
By David Feldman at 22 October, 2009, 8:40 am
Earlier this month Kohlberg Kravis Roberts, the famed private equity firm, featured in the classic book and movie Barbarians at the Gate, completed a reverse merger, without raising new funds, and is now a public company traded on the Euronext. It has taken quite awhile. Two years ago they tried an IPO but then that market dried up. This transaction was announced in July 2008. It got stalled thanks to the horrible market conditions. But it has now been consummated. KKR now joins Blackstone in the ranks of private equity firms that have seen the benefit (and at times the downsides!) of a public trading stock.
Technically they took over majority control of an affiliated public entity which trades in Amsterdam. They were planning a New York Stock Exchange listing, but apparently shelved that idea a few months ago, according to www.finalternatives.com. But www.msn.com says they hear the company will seek a NYSE listing next year. No new capital was raised, but it appears the main reason for going public is to raise capital at some point.
KKR now joins recent deals including Merck’s proposed merger with Schering-Plough and the New York Stock Exchange’s reverse merger with Archipelago Holdings, Inc. The reverse merger world is not limited to combinations with shell companies, it also includes larger private companies taking control of smaller public ones like the transactions above. The key is the ability to go public regardless of the IPO market and without the significant costs, delays and risks associated with an IPO.
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