|
|
KKR, the U.S. private equity firm and takeover specialist with $367 billion in assets, has established a five-person team in the U.K. to stalk takeover targets amid a record-breaking number of deals involving private equity companies in British businesses.
The five Brits will work “proactively” to build relationships with potential targets “as a main job,” Mattia Caprioli, co-head of KKR’s European operations, said in a Financial Times interview.
The combined weight of Brexit and an economy yet to recover from drastic, successive lockdowns has left British businesses on shaky ground: private equity firms have bought on bid on 366 U.K. companies, more than at any time since records began being kept in the 1980s, according to data firm Refinitiv.
“There’s more value at a high level in the U.K. than there is in other markets,” Caprioli said, noting that companies listed in Britain’s FTSE 100 stock index are trading at the same multiples they have been for years, while valuations in other indexes have risen with the global economic recovery.
KKR is finding competition already on the ground.
Blackstone, another U.S. private equity giant, has hired a British financial executive to drum up private equity deals; Carlyle Group has signed drug maker GlaxoSmithKline’s former CFO for the same purpose, the FT reported.
Some U.K. financial managers complain that the vulture companies are underpaying for their purchases, while some media outlets decry “predatory” takeovers.
Phillippe Freise, Caprioli’s co-chief, shrugged off the accusations, citing similar responses to the company’s aggressive acquisition schedule in Germany in the first years of this century and in France during the ‘teens.
“With greater uncertainty” about the future a national economy “comes more scrutiny,” he said. “It’s only right to ask questions about the participants.”
TRENDPOST: The fact that we are publishing four stories this week about Bigs getting bigger – private equity firms on the hunt in the U.K., JPMorgan Chase buying up small “pearls” around the world, M&A deals reaching global record levels, and the biggest long-haul trucker buying its way into a new market—emphasizes the speed at which Bigs are devouring individual pieces of our economy that add up to a banquet for them and a shrinking amount of leftovers for the rest of us.