Two decades ago, Kohlberg, Kravis, Roberts & Co. bought RJR Nabisco Inc., for a then record $31.4B. Today, that deal is smaller than it appears in the rearview mirror.
From January 1, 2006 to June 27, 2007, KKR - the firm Henry Kravis founded with cousin George Roberts and his one-time mentor Jerome Kohlberg in 1976 - announced 30 deals worth $215B, according to a story by Richard Teitelbaum in Bloomberg News.
While Blackstone’s IPO got a lot of press and Carlyle’s connections draw the ire of critics, KKR remains at the top of the private equity mountain, and that means big business: “We’re in, right now, the golden age,” boasted the 63-year old Kravis to a gathering of prominent Chinese-Americans and Wall Street executives, which included Yahoo! co-founder Jerry Yang, a company we’ve said is probably in the sights of PE firms.
Some stats:
- Cumulatively, PE portfolio companies employ 560,000 people, more than either Citigroup or GE.
- More people work for KKR companies than live in Atlanta, Miami, or St-Louis.
- As of May 31, KKR’s companies generated $107B in revenues throughout 2006. To put things into perspective, that’s more than Coca-Cola, MSFT and Walt Disney, combined.
- KKR has been involved in 20% of the $545B worth of deals announced this year, thus far.
Of course, now that Blackstone has gone public, the smart money suggests that KKR will do, too. With Kravis himself saying this is the golden era, one needs to ask if the time is ripe for PE to sell high and capitalize on the PE-envy of individual investors.
Disclaimer: I own shares in Yahoo!
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