RJR Nabisco LBO: financial specifics, entry and exit?
I've been trying to find KKR's IRR from this LBO. Figured this information would be fairly easy to find, but can anyone point me toward the financial specifics of this transaction (entry, exit)?
Have you read the book Barbarians at the Gate?
No- was hoping for an easier source of information.
RJR Nabisco LBO (Originally Posted: 09/27/2010)
I've been trying to find KKR's IRR from this LBO. Figured this information would be fairly easy to find, but can anyone point me toward the financial specifics of this transaction (entry, exit)?
(got nothing from the PE board)
In the afterward to Barbarians at the Gate, they say KKR "swapped" their RJR shares for shares in a different LBO. I have no idea what exactly that's supposed to mean but I imagine that would make finding the exact entry and exit prices difficult. In addition, they ended up injecting more equity capital to help buy out their resetting preferreds.
KKR got rid of their RJR shares by exchanging them with that of Borden Inc when they took that over.
Some specifics for the exit was:
1st exchange with Borden: 238 million shares of RJR for 69.5% of Borden
RJR IPO: 19.9% or 51.75 million shares @ $24.5/share 2nd exchange with Borden: 119 million RJR shares for remaining shares of Borden
I'll try to give more specifics later but right now I have to go, I got them from this book http://www.amazon.com/New-Financial-Capitalists-Kohlberg-Corporate/dp/0521642604
Hope that helps
Also on Wikipedia, if you search for KKR there is a section called "Aftermath of RJR Nabisco LBO."
Looks like they initially had put in $1.5B and then later put in another $1.7B. Then they exchanged most of it out for Borden and some in an IPO to further pay down debt and ended up selling Borden for $1.4B.
So it appears they actually lost $1.8B in this whole ordeal, but they probably took some special dividends out for themselves or perhaps paid some fees to themselves...or maybe they made a lot of profit out of Borden.
Does anybody else know what happened? I also would like to calculate the IRR of the RJR LBO.
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