Nov 25, 2019

KKR agrees to buy defense component manufacturer Novaria Group

Illustration: Lazaro Gamio/Axios

KKR agreed to buy Novaria Group, a Texas-based manufacturer of components for the aerospace and defense industries, from Rosewood Private Investments and Tailwind Advisors.

Why it matters: This is the latest example of KKR buying an industrials company and then giving employees equity, something that has not caught on with many other private equity shops.

How it works: Top executives and managers will be allowed to effectively buy into the LBO, while hundreds of lower-paid (mostly-hourly) workers will get zero-cost stock options.

  • Both groups get to participate in any dividends — CHI Overhead Doors, for example, has done three since KKR bought it 2015 — but employees must still be present at the time of exit.

The bottom line:

"We've learned on these deals that we need to overcommunicate, because most hourly workers have never held equity before ... open up the books, explain what the plan is, and how what they're doing every day fits into it. We also learned that personal financial literacy training can be a really helpful tool."
— Pete Stravros, KKR

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Pre-Thanksgiving Merger Monday sees over $60 billion in announced deals

Illustration: Sarah Grillo/Axios

It's been a while since we've had a full-fledged Merger Monday, but today we've seen over $60 billion in announced deals.

Why it matters: This isn't about a macro economic shift. It's about bankers and boards wanting to enjoy their Thanksgiving breaks, without constant cell phone pings.

Go deeperArrowNov 25, 2019

Private equity on defense in Washington

What's believed to be the first congressional hearing in recent years squarely focused on the practices of private equity firms is happening later this morning.

Why it matters: Private equity is facing "the most serious political challenge it has seen in years," per the WSJ.

Go deeperArrowNov 19, 2019

Private equity eyes another rural hospital chain

Photo: Andrew Lichtenstein/Corbis via Getty Images

Private equity giant KKR has floated a private buyout of Quorum Health, a 24-hospital system that operates in rural and small suburban communities, for about $30 million, or $1 per share. Quorum executives said they would "carefully consider" any deal.

Where it stands: Private equity has increasingly bought up hospital chains, doctors' groups, and ground and air ambulance companies due in large part to those firms' inherent market power. KKR, for example, just took physician staffing firm Envision Healthcare private for $10 billion last year.

Go deeperArrowDec 4, 2019