In 2007, the (financial) world was a very different place. Blackstone had just become the first ever private equity firm to offer itself up to the public. That $7.8bn initial public offering was roughly seven times subscribed, the FT reported at the time.
All in all, the first half of 2007 had been an excellent period for private equity. No one was riding higher than Blackstone, which had just secured two other (in hindsight, somewhat dubious) crowns: biggest leveraged buyout, and most epic birthday party.
Small wonder that KKR sought to assert itself. The Wall Street Journal reported in June of that year that the original barbarians at the gate were also seeking an IPO:
KKR began to prepare the documents for a possible listing months ago, according to people familiar with the matter. The demand for Blackstone shares, in addition to the huge demand for a limited public listing last year in Europe, ultimately encouraged Mr. Kravis and co-founder George Roberts to go ahead with the listing. CNBC reported yesterday that KKR had retained underwriters for the IPO.
A month later, the firm did indeed file the obligatory form S-1, and laid out plans to raise as much as $1.25bn. (FT Alphaville ran the numbers on what KKR vs Blackstone, IPO edition, would look like)
But the hype was short lived. Three months later, rumblings in the mortgage market put the firm’s plans in doubt. From the FT in August 2007:
A unit of Kohlberg Kravis Roberts, the powerful US private equity group, became the latest victim of the mortgage crisis on Wednesday, casting a cloud over its plans to raise $1.25bn in an initial public offering.
KKR Financial, which was floated two years ago to raise money from stock market investors for so-called mezzanine debt deals, said it was forced to sell $5.1bn in residential mortgages for a loss of $40m.
Eventually, in June 2009, KKR formally withdrew its proposal.
And so it did not come to pass – until today, when in a filing with the SEC, KKR said it intended to list 204.9m shares worth about $2.2bn. The firm will trade under the symbol KKR (shock) on the NYSE.
Good thing things are different this time round – and there are no mortgage or housing market issues to worry investors. Oh, wait…
Related links:
Private equity giant KKR plans US flotation – FT (Feb 2010)
KKR reveals Dutch IPO terms – FT
After KKR and Kirin, deals hot up in Asia-Pacific – FT Alphaville