Dec. 18, 2014, 8:31 AM
- After a couple of small, but wildly profitable shale deals several years ago, KKR went for a big one with the 2011 $7.2B buyout of Samson Investment - the largest-ever buyout of an oil and gas company.
- The investment at the moment is far underwater, reports the WSJ, as natural gas prices plunged almost immediately after the purchase, and the recent crash in crude oil has socked Samson even further. The company has lost more than $3B since the buyout, and KKR and partners' $4.1B investment has shrunk by 75%.
- The losses haven't diminished KKR's appetite for energy deals. "I'm glad we’re in the position that we are, as prices have come down significantly,” said Henry Kravis recently. "We see this as a real opportunity."
- As for Samson, analysts expect KKR will need to inject cash by early 2016, barring a big rise in oil and gas prices, or get better-than-expected proceeds from asset sales.
- In other news, Morgan Stanley's Michael Cyprys initiates KKR with a Buy.
Dec. 15, 2014, 10:56 AM
Dec. 13, 2014, 2:16 PM
- Leon Black’s Apollo Global Management (NYSE:APO) appears to have edged out KKR (NYSE:KKR) in the final round of bidding for PetSmart (NASDAQ:PETM), NY Post says.
- A deal could be announced as soon as this weekend.
- Banks led by Barclays and Citi are arranging $6.25B in debt financing, which is more than 6.5x PETM's Ebitda, exceeding the Fed's guideline of 6x Ebitda. Sources say at least two more banks dropped out of the running in recent weeks after being warned by the Fed and the OCC about taking on excess leverage.
- Previously: Banking issues cloud PetSmart buyout (Dec. 8), Report: Banker anxiety could derail PetSmart buyout (Dec. 5), P-E firms circle around PetSmart (Dec. 3)
Dec. 4, 2014, 10:19 AM
- In private-equity, Blackstone (BX +1.4%) and KKR & Co. (KKR +0.9%) post gains after being initiated with Overweight ratings, while Carlyle Group (CG -1%) and Oaktree Capital (OAK -0.5%) are started at Equal Weight.
- Moving onto traditional asset managers, Invesco (IVZ -0.5%) is rated Overweight, while T. Rowe Price (TROW -0.3%), Legg Mason (LM -1.5%), Franklin Resources (BEN -0.9%), and BlackRock (BLK -0.2%) are all started at Equal Weight.
Nov. 20, 2014, 3:35 PM
- Apollo Global (NYSE:APO) and KKR are among more than a dozen private-equity firms revising last year's annual reports to more clearly disclose fees and expenses charged to their clientele.
- “Everyone is doing it in response to the regulatory climate and the statements that have been coming out of the SEC,” says a lawyer who represents buyout firms.
- The P-E players have no doubt been meeting with their fund investors to clear up any misunderstandings, and while some have taken the additional step of revising old filings, others don't want to do so for fear of attracting more regulatory scrutiny to old practices.
Nov. 19, 2014, 2:06 AM
- As the auction for PetSmart (NASDAQ:PETM) heats up, buyout firms KKR (NYSE:KKR) and Clayton, Dubilier & Rice have teamed up to take the pet food retailer private for more than $7.5B, Reuters reports.
- Petsmart, which reported a FQ3 beat after the bell yesterday, said in August it would explore a potential sale amid pressure from Jana Partners and other activist investors.
- KKR and CD&R are planning to submit a joint bid next month. Apollo Global Management (NYSE:APO) and BC Partners are also considering offers.
- PETM +2.6% AH
Nov. 7, 2014, 12:58 PM
- P-E firms including KKR, Apollo Global Management (NYSE:APO), BC Partners and Clayton Dubilier & Rice have been invited to the final round of bidding for PetSmart (NASDAQ:PETM), WSJ reports.
- A deal to take PETM private would be the largest leveraged buyout of the year, according to data from Dealogic.
Oct. 28, 2014, 5:46 PM
- Anadarko Petroleum (NYSE:APC) +0.4% AH after Q3 earnings fell short of analyst expectations but revenue rose 30% to $5.01B, as stronger sales volume offset the impact of weaker average selling prices.
- Q3 total sales volume of crude oil, natural gas and natural gas liquids gained 9.5% Y/Y to 849K bbl/day from 775K a year ago.
- APC had sold its China subsidiary along with other assets during Q3, increasing its cash on hand to $8.3B.
- APC raises its full-year sales volume expectations for the third time this year, to a new range of 304M-306M boe, primarily driven by strong results from its Wattenberg horizontal program, where oil volumes doubled from Q3 of last year.
- Separately, P-E firm KKR says it will help APC develop its Eaglebine acreage in south Texas with a non-operated stake in the project; financial terms were not disclosed, but KKR says it expects to participate in 500 wells.
Oct. 23, 2014, 10:51 AM
- KKR (KKR +1.4%) is taking a serious look at PetSmart (PETM +0.6%), according to the New York Post.
- The investment firm has a nice track record in the pet supplier business after guiding Pets at Home to a profitable IPO.
- Firdt-round bids on PetSmart are due in by the end of the month with JPMorgan overseeing the action.
- Investors haven't really assigned a buyout premium on PETM as shares trade lower than they did three months ago.
Oct. 23, 2014, 8:37 AM
- Economic net income of $508.7M vs. $613.7M one year ago. ENI after taxes per unit of $0.50 vs. $0.80.
- Distributable earnings of $504.8M vs. $251.1M a year ago thanks to fast pace of realizations. Distribution per unit of $0.45 vs. $0.23.
- Private Markets AUM of $59.2B. Segment revenues of $631.6M vs. $788.5M a year ago. ENI of $399M vs. $531.8M. Lower investment income and a lower level of appreciation (up 2.2% for the Q) in the portfolio drove the declines.
- Public Markets AUM of $37B. Segment revenues of $93.6M vs. $83.5M a year ago thanks to higher management fees reflecting new capital raised. ENI of $48.1M vs. $37.6M.
- Capital Market revenues of $93.4M vs. $58M a year ago thanks to a greater level of deals. ENI of $61.6M vs. $44.4M.
- ROE of 24.7% during quarter.
- Conference call at 10 ET
- Previously: KKR beats by $0.06, beats on revenue
- KKR +3% premarket
Oct. 23, 2014, 8:10 AM
Oct. 22, 2014, 5:30 PM
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Oct. 19, 2014, 10:08 AM
- Remember last summer's private-equity legal settlements which ensnared sector names like Carlyle Group (NASDAQ:CG), Blackstone (NYSE:BX), KKR, and the P-E arm of Goldman Sachs (NYSE:GS) for colluding to keep a lid on the prices of buyout targets? Needless to say, management didn't bear the burden of the settlement penalties, but neither did the shareholders. In the case of Carlyle at least, the $115M fine was shouldered by the investors in one of its buyout funds.
- Those investors include state and city workers and retirees from across the country, and chances are they were unaware they were responsible for these costs due to the highly secretive nature of the agreements made between P-E and the pension funds which invest in them.
- Disclosure "would cause substantial competitive harm," says a Carlyle spokesman. “This is an overreach on Carlyle’s part, and frankly it violates the spirit of the indemnification clause of our contract,” says NYC Comptroller Scott Stringer, who oversees three city pension funds invested in that particular Carlyle vehicle.
- Private-equity firms now manage $3.5T in assets, and pension funds have been among the more willing investors, with 10% of their assets - or $260B - in P-E. Yet the terms of their deals - including what they're paying to take part - are hidden from view despite open-records laws demanding just the opposite.
- “Hundreds of billions of public pension dollars have essentially been moved into secrecy accounts,” says former SEC lawyer Edward Siedle. "It’s very damning legal boilerplate that sums up the fact that they are the highest-risk, highest-fee products ever devised by Wall Street.”
- ETFs: PSP, PEX
Oct. 6, 2014, 3:24 PM
- The P-E giant acquires a minority stake in Lemonade Restaurant Group, a cafeteria-style restaurant chain describing itself as a "Southern California smorgasbord."
- The company currently operates 14 West Coast locations and two in the Middle East, and will use KKR's investment to begin a significant expansion. There are currently seven stores under development in SoCal, one on the East Coast, and 28 in the Middle East.
- Interestingly, KKR's investment is with its own money, not from one of its buyout funds.
- Previously: Private-equity firms reportedly considering deals outside client funds
Sep. 29, 2014, 4:22 PM
- "We believe KKR has a proven track record in new fundraising and realizing attractive returns on investments in its diverse private funds," says S&P Capital IQ's Ken Leon, upgrading the stock to a Strong Buy from Hold. Though forecasting just low-single digit revenue growth, Leon sees funds available for new investments and cash returns to shareholders thanks to increased asset sales.
- His $26 price target is 9.9x estimated 2015 EPS of $2.62 - inline with peers and the upper end of KKR's historic range.
Sep. 29, 2014, 3:31 AM
- Australia's Treasury Wine Estates (OTCPK:TSRYY) has ended talks with private equity bidders for the sale of its business.
- "It is now apparent to the company that the bidders are not able to support a transaction on terms and at a price acceptable to the Board," says Treasury.
- The last takeover approach was made by TPG Capital in early August for $3.1B, and matched a bid from KKR (NYSE:KKR) and Rhone Capital.
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