KKR, the prominent U.S. buyout firm that helped to create the leveraged buyout industry, filed with regulators on Tuesday to raise up to $1.25 billion in an initial public offering
of common units.
The planned IPO follows last month's high-profile listing of rival Blackstone Group, which raised $4.13 billion and ushered in a new era for an industry that has come to dominate financial markets worldwide by pursuing ever-larger takeovers and raising record amounts of capital.
Unlike the Blackstone IPO, however, KKR's owners are not selling any common units or receiving any net proceeds.
Blackstone's co-founders, Stephen Schwarzman, 60, and Peter Peterson, 81, earned a huge windfall from the Blackstone offering, pocketing more than $2.4 billion between them.
Founded in 1976, KKR is led by founders Henry Kravis and George Roberts, both 63. The firm rose to prominence on the back of the debt-fueled leverage buyout (LBO) craze of the 1980s.
It carried out its first $1 billion LBO in 1984 and was involved in dozens of deals building up to the decade-defining 1988-1989 buyout of RJR Nabisco -- at the time the largest ever buyout of a commercial firm -- which was immortalized in the bestseller "Barbarians at the Gate."
While long reigning as Wall Street's buyout king, Kravis also established himself in New York's high society and a patron of the arts who has an entire wing of the Metropolitan Museum of Art and named after him.
But over the last few years, the spotlight has been on Schwarzman, who was hailed on the cover of a recent issue of Fortune magazine as "The new king of Wall Street."
Morgan Stanley and Citi are underwriting KKR's IPO, according to a preliminary prospectus filed with the U.S. Securities and Exchange Commission.
KKR intends to list its common units on the New York Stock Exchange under the symbol "KKR". It said it expected to complete the offering in the third or fourth quarter of 2007.