|Bid||29.40 x 900|
|Ask||29.41 x 800|
|Day's Range||29.27 - 29.54|
|52 Week Range||18.30 - 29.99|
|Beta (3Y Monthly)||1.67|
|PE Ratio (TTM)||15.24|
|Forward Dividend & Yield||0.50 (1.72%)|
|1y Target Est||N/A|
A private equity consortium led by European firms Cinven and Astorg has agreed to acquire British scientific measurement and testing company LGC Group from KKR & Co for an undisclosed sum. LGC provides measuring and testing services to the healthcare and affiliated markets and also liaisons with government bodies. New York-based private equity firm KKR bought LGC from Bridgepoint in 2015 for about 650 million pounds and has since helped the company grow through a string of acquisitions.
“We could have two years left,” says Carmel Wellso, director of research at Janus Henderson Investors. “But we’re at the end of the cycle and one day closer to a recession.”
Private equity firms are flush with cash, which means they have to spend it. Walgreens is being targeted by KKR. Barron’s has a few ideas about how to identify who could be in the PE crosshairs next.
(Bloomberg) -- KKR & Co. is seeking to raise $12.5 billion for its fourth buyout fund targeting Asia, a record size for the region, according to a fundraising document seen by Bloomberg.The New York-based firm began marketing the fund this week, the document shows. The proposed amount is about a third greater than its previous $9.3 billion fund raised in 2017, much of which has already been invested. A Hong Kong-based spokeswoman for the company declined to comment.Buyout giants including TPG, Bain Capital and Baring Private Equity Asia have stockpiled tens of billions of dollars for regional funds over the past year or so as investors increasingly channel their money to firms with scale and the most prominent reputations. KKR is betting that Asia, which accounts for most of the world’s economic growth, and the continent’s expanding ranks of billionaires and middle-class consumers will continue to fuel ever-larger deal-making.KKR’s third fund put a greater emphasis on buyouts, taking control of companies including EuroKids International Pvt. in India and MYOB Group Ltd. in Australia. That fund has generated a net return of 43%, a regulatory filing shows, partly driven by investments in KCF Technologies in Korea and Hitachi Kokusai Electric Inc. in Japan. The firm also raised about $6.5 billion this month for its latest European buyout fund, which will focus on transactions in Western Europe.KKR is tapping the market for capital after investing $3.87 billion of its latest Asia war chest as of Sept. 30, according to its filing. That doesn’t include announced transactions involving Metro Pacific Hospital Holdings Inc. and NVC Lighting Holding Ltd.The new fund would surpass the $10.6 billion raised by Chinese investment firm Hillhouse Capital Group last year.\--With assistance from Heather Perlberg.To contact the reporter on this story: Cathy Chan in Hong Kong at email@example.comTo contact the editors responsible for this story: Jun Luo at firstname.lastname@example.org, David ScheerFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- Jeremy Corbyn’s Labour Party is behind in the polls for the U.K. election so it’s unsurprising that he’s chucking out more giveaways to voters. The policy to nationalize BT Group Plc’s fixed-telecoms networks business and provide free fiber broadband to every British household is a humdinger nonetheless.Of course, the chances of this becoming reality are slim given that Corbyn’s best hope of becoming prime minister is a coalition with more moderate political parties. Yet the idea has stimulated even more debate than Labour’s previous plans to re-nationalize the railways and the energy utilities, so it’s at least worth thinking about. Taking it at face value, the policy would be a huge mistake that would achieve the opposite of its stated aim of accelerating Britain’s sluggish rollout of fiber broadband.First, there’s the cost. A Labour government would add 15 billion pounds ($19 billion) to an existing 5 billion pound broadband spending pot, according to Shadow Chancellor John McDonnell. Even assuming that would cover the required capital expenditure — a big assumption — it would cost at least the same again to nationalize Openreach, BT’s networks division.McDonnell says the state would pay for the acquisition by giving BT’s shareholders government bonds as compensation. Yet why would investors, especially those outside the U.K. protected by treaties against asset expropriation, exchange an 8.1% annual dividend yield from their BT stock for the less than 1% returns from U.K. gilts? The network spending itself would be funded by an increased tax on the likes of Facebook Inc., Alphabet Inc. and Amazon.com Inc. But the G-20 will probably adopt new international tax standards next year to try to curb Big Tech’s avoidance tactics. So a Labour government might not even be able to whomp up these levies without breaching the new guidelines.Then there’s the speed of rolling out the networks. While the U.K. is well behind the pace on high-speed broadband rollout (it’s 10th in the European Union’s 2019 connectivity rankings), a tortured nationalization process isn’t the answer. BT would have no incentive to keep investing during that period.The same’s true for private competitors such as John Malone’s Virgin Media, Vodafone Group Plc and Comcast Corp.’s Sky. Increased competition has at least accelerated the pace of the rollout: The proportion of homes with fiber access has doubled in two years.Infrastructure investors have also been attracted by the returns promised by fiber, prompting a flurry of investment from KKR & Co., Macquarie’s infrastructure fund and Goldman Sachs Group Inc. McDonnell’s comments have certainly caused some consternation. TalkTalk Telecom Group Plc. said it had paused talks to sell a fiber project, for which Goldman-backed CityFibre Ltd. was the lead bidder. Should Labour ever get the chance to offer free broadband to everyone through a state-owned provider, tens of thousands of private sector jobs would be jeopardized. How would other companies be able to compete?And full-fiber broadband might not even really be necessary. The adoption of next-generation 5G mobile networks promises the ability to transmit far more data at far greater speeds. That would make fiber to every home redundant in parts of the country.There are better and more thoughtful ways to get fiber installed sooner: Making it easier to get permits to build the network; permanently reducing business tax rates for new fiber; and making it obligatory for customers to accept fiber upgrades. If McDonnell is willing to hand over 15 billion pounds to BT shareholders to snap up Openreach, why not use the funds to subsidize the rollout directly?To contact the author of this story: Alex Webb at email@example.comTo contact the editor responsible for this story: James Boxell at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Alex Webb is a Bloomberg Opinion columnist covering Europe's technology, media and communications industries. He previously covered Apple and other technology companies for Bloomberg News in San Francisco.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- Ron Sim, founder of one of Asia’s largest massage chair makers, is in talks to partner with a unit of Temasek Holdings Pte. and other firms to bid for one of Singapore’s new virtual banking licenses, according to people familiar with the matter.V3 Group Ltd., Sim’s Singapore-based firm, is discussing forming a consortium with Temasek’s Heliconia Capital Management Pte, as well as stored-value card company EZ-Link Pte and property giant Far East Organization Pte, said the people, who asked not to be identified because the discussions remain private. The group plans to seek one of Singapore’s new retail digital banking licenses, they said.The city-state has announced plans to award as many as five digital banking licenses to non-bank firms as it seeks to shake up its financial-services industry and create competition for traditional lenders. Thresholds are higher for the two retail licenses available -- they require S$1.5 billion ($1.1 billion) in paid-up capital as well as local control.Why Asia’s Banking Hubs Are Making Virtual a Reality: QuickTakeA representative for V3 said the firm is committed to developing digital financial offerings for the underserved in Singapore and the region, but didn’t comment on its specific plans. Heliconia, EZ-Link, and Far East Organization declined to comment.Financial TechnologyV3, which owns massage-chair maker OSIM and tea brand TWG, recently created a financial technology unit. It announced Thursday it hired Gan Chee Yen, formerly the chief executive officer of Fullerton Financial Holdings, another Temasek unit, as a senior adviser for the fintech unit. Last year, KKR & Co. said it will invest up to S$500 million ($367 million) for a stake in V3.Far East Organization is Singapore’s largest private real-estate developer, with assets from residential to commercial properties. The company is led by Chief Executive Officer Philip Ng, whose family owns the firm, and is among the ten richest people in Singapore, according to the Bloomberg Billionaires Index.EZ-Link, founded by Singapore’s Land Transport Authority in 2002, supplies a contactless payment system for the nation’s public transport services.Another Temasek unit, Vertex Ventures, is part of a different group that will apply for another digital bank license. The members of the consortium to seek a wholesale permit include peer-to-peer lender Validus Capital Pte, Oversea-Chinese Banking Corp. and Keppel Corp.(Updates with declines to comment from Heliconia, Far East in fourth paragraph; adds Far East background in sixth paragraph.)To contact the reporters on this story: Chanyaporn Chanjaroen in Singapore at email@example.com;Abhishek Vishnoi in Singapore at firstname.lastname@example.org;Joyce Koh in Singapore at email@example.comTo contact the editors responsible for this story: Marcus Wright at firstname.lastname@example.org, Joyce Koh, Jake Lloyd-SmithFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- One of the private equity industry’s titans called it a “stretch,” and it’s been dismissed as a pipe dream by a bevy of analysts.Yet interviews in recent days with debt-market specialists suggest that KKR & Co. could find a narrow path to finance what would be the biggest leveraged buyout in history: a potential take-private deal for pharmacy chain Walgreens Boots Alliance Inc. that analysts have estimated would need to be funded with at least $50 billion of debt.The challenge for any Walgreens suitor will be raising the necessary money via the markets of choice for private equity firms -- junk-rated loans and bonds -- which have become fragile after an unprecedented borrowing binge left investors with a hangover. Debt funds that financed more than $3.5 trillion of leveraged buyouts in the past decade have become pickier, leaving banks stuck holding more than $2 billion of unsold loans on their balance sheets as recently as last month.But a road map may be hidden in two other recent debt-fueled takeovers: Dell Technologies Inc.’s $67 billion takeover of EMC Corp. in 2016 and Charter Communications Inc.’s $78.7 billion acquisition of Time Warner Cable Inc. that same year.Representatives for KKR and Walgreens declined to comment.Buyout BlueprintJunk-rated Dell and Charter both borrowed heavily in the investment-grade bond market by issuing secured debt. T-Mobile US Inc. is going down a similar route to help pay for its purchase of Sprint Corp.In Charter’s case, it pledged security to new and existing bonds issued by higher-rated Time Warner to ensure the debt remained investment-grade. Dell used a similar strategy when it bought investment-grade rated EMC. Walgreens’s debt could be segregated into two borrowing structures at a holding company level and an operating company portion, with investment-grade debt placed on the latter.In doing so, Dell and Charter won access to the most stable part of the corporate debt market, where investors are still buying heavily as an alternative to low or negative-yielding assets elsewhere. At the same time, they limited their reliance on leveraged finance markets, where sentiment can shift quickly and prove costly.Both companies did tap those markets, but with more manageable offerings. Bankers who asked not to be identified estimated that Walgreens would be able to raise between $10 billion and $20 billion of junk-rated debt to fund a buyout.Other market participants, who asked not to be named because they weren’t authorized to speak publicly, said KKR still might need to find a deep-pocketed third-party investor to help put more equity into the deal.Or it may seek to spin off a portion of Walgreens to lessen its financing needs. The company’s European operations could potentially bring in $18 billion to $20 billion, CreditSights analyst James Goldstein said in a phone interview.\--With assistance from Nabila Ahmed and Robert Langreth.To contact the reporters on this story: Natalie Harrison in New York at email@example.com;Lisa Lee in New York at firstname.lastname@example.org;Davide Scigliuzzo in New York at email@example.comTo contact the editors responsible for this story: Shannon D. Harrington at firstname.lastname@example.org, Boris KorbyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Zac Barnett and Richard Wheelahan, III By Oliver Estreich How does governance come into play for institutional asset managers. One key area is how leverage is managed, according to Richard Wheelahan, III, and Zac Barnett, the Co-Founders of Fund Finance Partners. Over the past decade Richard has advised fund sponsors and lenders, both as […]
(Bloomberg) -- KKR & Co. has formally approached drugstore giant Walgreens Boots Alliance Inc. about a deal to take the company private, in what could be the biggest-ever leveraged buyout, people familiar with the matter said.The New York-based private equity firm has been preparing a proposal to potentially buy out shareholders of Walgreens Boots, said the people, who asked not to be identified because discussions are private. It’s unclear how feasible the transaction would be, given the need for large amounts of financing, and Walgreens Boots and KKR could decide against pursuing a deal, the people said.Walgreens Boots shares closed 5% higher to $62.25 on Monday in New York. Its bonds in Europe fell.Walgreens Boots, led by Chief Executive Officer Stefano Pessina, has been reviewing a potential deal with a financial adviser to take the company private amid buyout interest, Bloomberg News reported last week. Some buyout firms looked but decided against pursuing such a big deal, people with knowledge of the matter said at the time.There’s no certainty the deliberations will lead to a definitive takeover offer, the people said. Representatives for Walgreens Boots and KKR declined to comment.Record BuyoutDeerfield, Illinois-based Walgreens Boots has a market value of about $56 billion and $16.8 billion of debt. At that size, a take-private of the company would top the largest leveraged buyout in history: the 2007 sale of utility TXU Corp. to KKR and TPG, which was worth about $45 billion including debt, according to data compiled by Bloomberg.This wouldn’t be Pessina’s first ambitious private equity deal with KKR. Pessina partnered with the buyout firm to acquire Alliance Boots in 2007.That deal came at the height of the buyout boom and underscored the challenges of financing jumbo take-privates, as banks struggled at the time to find buyers for the loans to pay for that deal. But it was lucrative for KKR. By the time it exited the company more than nine years later, the firm generated about $7 billion for fund investors on an investment of $2.1 billion, Chief Financial Officer Bill Janetschek said in 2017.This time, a deal would require Walgreens Boots to sell some $55 billion of debt, according to CreditSights Inc. estimates. If raised in the junk markets, that would amount to the biggest such sale ever.The money would have to come from markets where banks have struggled in recent months to find buyers for riskier, leveraged buyout loans, as investors weigh the risks of lending at the peak of a record-long credit boom.It’s a tough time do such a large deal, according to Stephen Schwarzman, head of the Blackstone Group Inc., one of the world’s largest private equity firms.“It might be possible,” Schwarzman said last week at a Reuters Newsmaker event in New York. “It’s a huge stretch doing things over $50 billion.”Under PressurePessina, 78, took his current role after Walgreen Co. acquired the part of Alliance Boots that it didn’t already own for about $15.3 billion in 2014. The company’s businesses range from established retail chains in the U.S. and Europe to the lesser-known pharmacy supplier Alliance. He owns a 16% stake in Walgreens Boots, according to data compiled by Bloomberg.A buyout would give Walgreens Boots time to adapt to a fast-changing retail landscape, free from the quarter-by-quarter demands of public shareholders.The company is under immense pressure from online competitors including Amazon.com Inc., that have chipped away at sales of household and beauty items. While top rival CVS Health Corp. has grown into a vertically integrated health-care giant, Walgreens Boots has doubled down on shops, announcing pilot partnerships with retailers including grocer Kroger Co.Walgreens Boots is the largest retail pharmacy in the U.S. and Europe, with more than 18,750 stores in 11 countries, according to its most recent annual report. Its wholesale arm has more than 400 distribution centers that deliver to more than 240,000 pharmacies, doctors, health centers and hospitals. It operates Walgreens and Duane Reade stores in the U.S. and Boots outlets in Europe and Asia. Three-quarters of its revenue stems from the U.S. pharmacy business.The company had sought to buy rival Rite Aid Corp. In 2017, the companies scrapped the merger amid regulators’ concerns that it would hurt competition in the U.S. drugstore market. Walgreens Boots instead bought roughly 2,000 stores from Rite Aid.(Updates share price in third paragraph, adds additional detail in eighth paragraph.)\--With assistance from Robert Langreth, Kiel Porter and Nabila Ahmed.To contact the reporters on this story: Ed Hammond in New York at email@example.com;Aaron Kirchfeld in London at firstname.lastname@example.org;Dinesh Nair in London at email@example.comTo contact the editors responsible for this story: Ben Scent at firstname.lastname@example.org, ;Daniel Hauck at email@example.com, Matthew MonksFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The blue-chip stock index spent most of the morning in negative territory, weighed down by concern over prospects for a trade deal and the increasingly violent protests in Hong Kong.
A leveraged buyout of the drugstore company would be tough to pull off, given the company’s size and the amount of equity likely needed to finance a deal.
The 6.3% rally in Walgreens Boots Alliance Inc.'s stock , after a Bloomberg report of KKR & Co.'s interest in a leveraged buyout of the drugstore chain, was the leading gainer of the 8-of-30 Dow Jones Industrial Average components gaining ground in morning trading Monday. The stock's $3.74 price gain was adding about 25 points to the Dow's price, which was down 99 points, or 0.4%. Walgreen's stock remains the worst performing Dow stock over the past 12 months, as it has shed 23.6% over that time period. The 2nd-worst performer over the past year is Pfizer Inc.'s stock , which has lost 16.5%.
Shares of Walgreens Boots Alliance rallied 6.4% toward a 7-month high in morning trading Monday, after Bloomberg News reported that the private equity giant KKR & Co. had approached the pharmacy chain about a buyout. If the deal moves forward, which could be valued at north of $70 billion, it would be the largest leveraged buyout ever. Like other pharmacy retailers, Walgreens is facing pressure from a combination of weak retail shares and drug reimbursement pressure. Reuters first reported last week that the company was considering going private. Walgreens stock is down 7.8% year-to-date, while the Dow Jones Industrial Average has rallied 18.2%.
Shares of Walgreens Boots Alliance jumped Monday morning after Bloomberg reported that the private-equity giant KKR has formally approached the pharmacy retailer about a leveraged-buyout offer.
(Bloomberg) -- KKR & Co. is considering an initial public offering of Chinese digital marketing company Cue Holdings Ltd. that could raise as much as $400 million, people with knowledge of the matter said.The company is working with financial advisers on the potential share sale, which could take place as soon as the first half of next year, according to the people. It has been considering Hong Kong and the U.S. as potential listing venues, the people said, asking not to be identified because the information is private.Chinese companies have raised $16 billion from overseas IPOs this year, down from $39 billion during the same period in 2018, according to data compiled by Bloomberg. No final decisions have been made, and details of the IPO could change, the people said. A representative for KKR declined to comment.Cue seeks to help Chinese companies with their digital marketing strategy to boost their business growth. Its clients include consumer brands, financial institutions, online gaming companies and internet service providers.In August, Cue completed a series A financing round led by Anchor Equity Partners to fund research and development, add-on acquisitions and improvements in Cue’s products and services. KKR, which was Cue’s founding investor, and Princeville Global also participated.(Updates with IPO volume in third paragraph.)To contact the reporters on this story: Manuel Baigorri in Hong Kong at firstname.lastname@example.org;Cathy Chan in Hong Kong at email@example.comTo contact the editors responsible for this story: Fion Li at firstname.lastname@example.org, Ben Scent, Amy ThomsonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Private equity giant KKR & Co Inc. wants to raise $15 billion for a new Asia-focused buyout fund. According to Reuters, the New York-based firm (NYSE: KKR) will begin fundraising in the first quarter of 2020 and expects to close the fund by June. Should it raise that much, it would break KKR's own 2017 record of a $9.3 billion fund.
Global private equity group KKR & Co Inc is targeting a record $15 billion (£11.7 billion) for a new Asia-focused buyout fund, three sources with knowledge of the plan told Reuters. Buyout groups including Bain Capital, Blackstone , Carlyle , and KKR are increasingly focusing on Asian investments as lower valuations and corporate restructuring throw up new opportunities in key markets. KKR's fundraising will start in the first quarter of 2020, with the aim of achieving first close, an important milestone indicating the fund has crossed a minimum threshold and can begin making investments, by June, the people said on Thursday.