Remember when everyone was speaking about a $100 billion buyout?
Posted by: in Private Industry NewsFiled under: KKR, Private equity industry
Today’s Wall Street Journal reminisces about the height of the private equity boom: “Remember when Blackstone Group and Kohlberg Kravis Roberts & Co. seemed to be competing for the title of World’s Largest Buyout? Or when speak of a $50 billion or even $100 billion buyout was bandied about?”
What’s interesting is that the top of the buyout bubble seems to have been marked by a lot of speak about large buyouts and competition among buyout firms for the biggest deals.
It’s reminiscent of the deal that was the high point of the LBO-mania of the 1980s (after that bubble, LBOs got a bad name so now they’re called private equity deals. I wonder what they’ll be called next?). KKR’s high-profile buyout of RJR Nabisco was very similar: the top buyout shops in the world were competing for a prize, and KKR couldn’t afford the reputation hit that would come from losing out to any of the other players, nearly all of whom were involved. In the end, KKR went home with a Pyrrhic victory and, having paid too high a price, failed to generate value from the deal.
So maybe that’s a good sign of the top of a market: it becomes about ego rather than greed.
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