KKR Asset Management (:KAM), Kohlberg Kravis Roberts & Co. L.P.’s (KKR) leading sub-investment grade manager, recently signed an agreement to acquire Winoa Group from LBO France. The value of the deal has not been divulged and it is subject to regulatory approval.
The aforementioned deal was financed by KAM Special Situations’ investment funds. Further, it involves a recapitalization program wherein Kohlberg Kravis will infuse Winoa with fresh capital, thereby relieving its debt burden to a large extent.
Winoa, a global name in the field of steel abrasion and diamond cutting, was acquired by LBO France – the oldest private equity firm in France – in 2005. The company’s performance, however, has suffered lately due to the eurozone crisis. The capital structure was hit hard and the company resorted to a huge debt.
The takeover would give Winoa the necessary support in the form of enhanced financials, increased access to funds and better management. Kohlberg Kravis, on the other hand, would be able to capitalize on Winoa’s sector expertise to boost profitability in the long run.
Kohlberg Kravis, an investment manager, is keen on acquiring distressed properties with potential for growth. Given its sound liquidity and balance sheet position, we expect the company to drive further inorganic growth in the quarters ahead.
Currently, Kohlberg Kravis carries a Zacks Rank #2 (Buy). Some better-ranked investment managers include GAMCO Investors, Inc. (GBL), Waddell & Reed Financial, Inc. (WDR) and Affiliated Managers Group Inc. (AMG). While GAMCO Investors and Waddell & Reed have a Zacks Rank #1 (Strong Buy), Affiliated Managers holds the same Zacks Rank as Kohlberg Kravis.