According to a study by Moody's, the buyout firm KKR is actually less likely than other similar firms to do what many critics say buyout firms do: replace assets with debt in order to take a big payday, thereby leaving their target companies in precarious financial condition. Examining 176 deals over the last five years, the Moody's study paints a surprisingly positive view of KKR in this regard, at least when compared to similar firms.
In details discussed over at Deal Journal, KKR traded big money for big debt -- a process known as "dividend recapitalization" -- less than half the time over the five year period. By contrast, Providence Equity Partners and Cerberus Capital Management took that route in the majority of cases.
Another surprising bit of data: KKR is the only major private equity firm that saw the debt ratings of its target firms rise after the majority of its buyouts.
So say what you want about the savage pirates at KKR -- it turns out that they are actually the nicest pirates you're likely to encounter in the financial markets.
KKR: Nice guys after all?
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