He had lived before in East of United States, and then moved in California to study at University of Claremont. In 1969 he got a MBA from Columbia University, and then with his cousin, George R Roberts, he joined the investment bank Bear Stearns. Both worked under the command of Jerome Kohlberg Jr. head corporate finance.
Kohlberg is a precursor of “bootstrap” buyout. He looks for a little enterprises and weakly valued or big group’s branch with the same problems, and then he helps the managers’ team to buy the company.
In 1976, after several negations from Bear Sterns to finance some of his projects, he left the Bank with Henry R Kravis and George R Roberts. Together they funded an investment firm; it will become one of the most important in U.S. the “Kohlberg Kravis Roberts & co", alias KKR.
In the followed six years, Henry Kravis made some partnership in order to buy, to reorganize (discharges, reduce costs, etc.) and to sell company’s assets non performing or branch, before to sell the company at price higher than that which it was bought.
Typically, in takeover’s operations KKR used its own funds for 10% of the purchase price and borrowed the rest, especially with “Junk Bonds” issues.
Among the companies, which were bought from KKR, we can find A.J. Industries, Lily-Tulip and Houdaille Industries. Houdaille Industries was the first big company listed in New York, which was bought with a leverage buyout.
In 1984, KKR made his fist LBO bigger than one million dollars. This was the Wometco’s takeover. In the same year KKR bought Amstar for $450 million and in 1986 he resold for $700 million.
In 1987, Jerome Kohlberg left the firm and Henry Kravis succeeded him as senior partner.
In 1988, KKR took control of RJR Nabisco (giant of tobacco and food and 19th among most big groups in US) for $25 billion, about two times the previous world record for the purchase of commercial enterprise. This biggest financial deal is a subject also of several movies, and instantly Henry Kravis and his cousin George Roberts were transformed as stars beyond financial world.
For its founding KKR, has completed buyout for more than $73 billion concerning 45 companies. Among these we can find Texaco, Gillette, Playtex, Samsonite, etc...Henry Kravis is now a member of the board of many companies (American-Re, Duracell, Union Texas Petroleum…)
In recent years, the results of firm were more mitigated. The firm is still controlled by Kravis and Roberts and it opened also an office in London. However, it lost many of his associates, including many who made his reputation in the 80s.
Kravis’s fortune is estimated at $5.5 billion and he is the 107th richest man in US.
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