Abstract

Kohlberg, Kravis, Roberts & Co (KKR), one of the most well-known leveraged buyouts (LBO) firms, is at the crossroads. KKR typically used debt to buy out companies by raising money from institutional investors. While one founder Jerome Kohlberg (Kohlberg) has left the firm many years ago (1987), the other founders Henry Kravis (Kravis) and George Roberts (Roberts) having turned 60 are on the verge of retirement. The LBO business has been facing severe competition from other firms. As the number of attractive deals has decreased, buyout firms are sharing takeover targets. Competition from Thomas H Lee, Warburg Pincus, Carlyle and Blackstone is increasing. The case discusses the changing scenario in the LBO business and the future of KKR.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

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Keywords

KKR, Kohlberg, Kravis, Roverts, KKRs business model, Leveraged buyouts, LBO, LBO business, RJR Nabisco, KKR takeovers, Covanta Energy Group, Motoren and Turbinen Union, MTU, KKR BDC, PanAmSat, CSFB, Credit Suisse First Boston, Henry Kravis, Corporate strategy