Kohlberg Kravis Continues to Expand - Analyst Blog


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In sync with its inorganic growth strategy, Kohlberg Kravis Roberts & Co. ( KKR ), the U.S. based private equity firm, entered into a definite agreement with National Vision, Inc. to acquire the latter from Berkshire Partners. The deal is expected to close by the end of first-quarter 2014.

The financial clauses of the deal were not disclosed. However, as per a Reuters report, a source well acquainted with the matter divulged that the value of the transaction could amount to more than $1 billion.

Kohlberg Kravis will finance the deal with its North American XI private equity fund. Simpson Thacher & Bartlett LLP was the company's legal advisor for the deal. Further, while Barclays PLC ( BCS ) acted as the financial advisor to National Vision, Wells Fargo & Company ( WFC ) was the co-advisor.

National Vision is a leading optical retailer in the country and specializes in manufacturing cost-friendly contact lenses and eyewear. The products that are already available at 750 low price vision centers across U.S. will expectedly become more popular among customers, given their economic price.

Therefore, National Vision seems to be a lucrative pick for a company like Kohlberg Kravis that boasts an impressive history of growth through meaningful acquisitions and mergers. Some of the latest deals reflect not only the company's global expansion strategy but also its plans to widen its portfolio to sectors ranging from software to healthcare.

Kohlberg Kravis posted an earnings beat in the last quarter of 2013, aided by top-line growth. Going forward, we believe that its strategic investments will continue to drive the top line.

Kohlberg Kravis currently carries a Zacks Rank #3 (Hold). A better-ranked investment manager is Waddell & Reed Financial, Inc. ( WDR ). It currently holds a Zacks Rank #1 (Strong Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
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