Kohlberg Kravis Roberts & Co. was born when, on May 1, 1976, three Bear Stearns & Co. employees — Jerome Kohlberg and cousins Henry Kravis and George Roberts — quit their jobs to put up a private equity firm specializing in leveraged buyouts.

KKR pioneered the concept of leveraged buyouts. The company is arguably the world’s most popular private equity buyout firm and is considered a pioneering outfit in asset management. Leveraged buyouts refer to the use of large borrowed money and equity dollars to orchestrate a takeover of a business. Usually the firm is undervalued, with predictable cash flow and minimum debt. Upon acquisition, the private equity firm and its selected partners would then make a concerted effort to raise the company’s value, before eventually selling it.

KKR’s first takeover was in 1977 when it acquired A.J. Industries. In 1979, it engineered the $380 million buyout of Houdaille Industries in the first ever leveraged buyout of a mid-sized company.

Throughout the next decade, KKR took a penchant for more aggressive transactions. KKR once again made history when it pioneered billion-dollar buyouts in 1984 with the takeover of Wometco Enterprises.

Renowned brands were soon tucked under KKR’s portfolio. The company took over Safeway Stores, then the world’s biggest food retailer, for $4.3 billion in 1986. That same year, it acquired Beatrice Companies for $8.7 billion. Two years later, KKR acquired the premier alkaline battery maker Duracell.

Some of the largest takeovers around the world can be traced to KKR. It boasts of the largest takeovers in, among others, Denmark (TDC A/S), the Netherlands (NXP, Maxeda), India (Aricent), France (Legrand, PagesJaunes Groupe), and Singapore (Avago Technologies). The largest leveraged buyout in Europe, worth £12.4 for Britain’s Alliance Boots, was engineered by KKR.

In fact, KKR is on record for making the largest leveraged buyout ever in the US or elsewhere — $48.4 billion for energy company TXU. The deal, made in 2007, was a watershed deal for KKR in that it allowed Environmental Defense and The Natural Resources Defense Council to intervene in the affairs of the company. TXU had a proposal to build a network of coal plants, but through the work of KKR and the Environmental Defense Fund, this potentially environmentally damaging proposal was stopped.

To date, KKR has piloted more than 150 transactions worth over $300 billion with profits of nearly $35 billion. Over the years, its portfolio has expanded to include such recognized names in global commerce as Toys “R” Us, Masonite, Sealy, and Spalding.

KKR employs over 500 people across the globe, encompassing former CEOs of companies and 120 investment professionals. Founders Henry Kravis and George Roberts still serve as KKR CEOs.

Additional Information on Kohlberg Kravis & Roberts (KKR)

Kohlberg Kravis & Roberts (KKR) moves toward a U.S. listing.

Kohlberg Kravis & Roberts (KKR) and EDF Partnership Helps Companies Save Over $16 Million While Reducing Emissions and Waste.

E-Trade’s profile of Kohlberg Kravis & Roberts (KKR).

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