| • Science | • People | • Locations | • Timeline |
KKR helped develop the acquisition concept known as the leveraged buyout (LBO) by creating a series of limited partnerships to acquire various corporations, ones they judged were performing well below their sales and profit potential. In most cases, KKR put up ten percent of the acquisition price from its own funds and borrowed the rest from investors by issuing high-yield bonds. In the 1980s, these high-yield bonds, which were also high risk, became known as "junk bonds." Investment bankers such as Drexel Burnham Lambert , led by Michael Milken, raised enormous amounts of money for leveraged buyouts. Once the targeted company was successfully taken over, KKR then organized a drastic restructuring, selling off selected assets or subsidiaries and implementing a series of cost-cutting measures. The new, "leaner and more efficient" company could then be resold, often for a large profit.
In 1987, Jerome Kohlberg resigned from the firm and Henry Kravis succeeded him as senior partner. Under Kravis, the firm was responsible for the 1988 leveraged buyout of RJR Nabisco. At a cost of $24.88 billion, it was the then highest price ever paid for a commercial enterprise. The publicity surrounding the event led to the story being dramatized in the book, and subsequent film. In early 1995, KKR divested its remaining holdings in RJR Nabisco.
The list of companies KKR has bought and sold over the years includes many of the great American brand names such as Texaco, Gillette, Playtex , Beatrice , SafewaySafeway ( NYSE: SWY is North America's second largest supermarket chain, with over 1800 stores located throughout the central and western United States and Canada. It also operates some stores in the Mid-Atlantic region of the Eastern Seaboard. The compan, Borden , and Samsonite . Recently, KKR has been expanding into Europe with acquisitions such as MTU Aero EnginesMTU Aero Engines Germany's leading aircraft engine manufacturer, develops, manufactures and provides service support for aircraft engines, military and civil alike. MTU Aero Engines was formerly known as MTU Munchen . Its customers are manufacturers and o.
As of 1996, general partners (as opposed to associates) included Henry Kravis, George R. Roberts, Paul E. Raether , Robert I. MacDonnell , Michael W. Michelson , Saul A. Fox , James H. Greene, Jr. , Michael T. Tokarz , Clifton S. Robbins , Scott M. Stuart , Perry Golkin and Edward A. Gilhuly . Gilhuly is now the Managing Partner of KKR's EuropeanFor the band of the same name, see Europe (band . Europe is a continent forming the westermost part of the Eurasian supercontinent. Europe is bounded to the north by the Arctic Ocean, to the west by the Atlantic Ocean, to the south by the Mediterranean Se operations, based in LondonLondon is the capital of the United Kingdom and of England, and with over seven million inhabitants in the Greater London area, is the second-most populous conurbation in Europe (after Moscow). From being Londinium the capital of the Roman province of Bri.