Merchants of Debt: KKR and the Mortgaging of American Business

From Publishers Weekly
This inside look from a Wall Street Journal reporter at massive leveraged-buyout operations of the Manhattan-based Kohlberg Kravis Roberts financial partnership during the 1980s is beautifully organized and written in immediate and lively prose. Anders explains how KKR, with incredible audacity, borrowed billions in cash from investment bankers, pension plans, college endowments and even their takeover targets' willing management to buy and saddle with heavy deductible debut such giant corporations as Safeway, Beatrice, Duracell and RJR Nabisco. After quick and ruthless efficiency measures were imposed on the corporations to enhance earnings and pay off the debt, assets were then resold, yielding millions of dollars in fees and profits. The game collapsed with the 1990 onset of recession, and the author here reveals how KKR leadership survived while other financiers went under or to jail. First serial to Wall Street Journal. Copyright 1992 Reed Business Information, Inc.

From Library Journal
Kohlberg Kravis Roberts & Co. (KKR) was founded in New York in 1976 by three enterprising investment bankers, Jerry Kohlberg, (...) Kravis, and George Roberts, with the simple purpose of assisting companies to participate in management-led buyouts or leveraged buyouts (LBOs). While its origins were humble, KKR's lifespan to date has not been, having spent almost $60 billion in 38 buyouts of companies, which resulted in a reshaping of corporate America. Wall Street Journal reporter Anders chronicles the rise of KKR during the 1980s, the "age of debt," and shows how a simple formula using borrowed money could be successfully repeated over and over again in corporate takeovers, bringing untold wealth and power to the men of KKR and to their investors. The pinnacle of success for KKR was the RJR Nabisco buyout in 1989 costing $26.4 billion (this is covered at length in Bryan Burrough and John Helyar's Barbarians at the Gate , LJ 1/90). Unfortunately, the free-spending 1980s gave way to the recessionary 1990s, and KKR's fortunes similarly declined, with its partnership unraveling. This compelling book is recommended for all business collections.- Richard Drezen, Merrill Lynch Lib., New YorkCopyright 1992 Reed Business Information, Inc.

From Kirkus Reviews
A revealing, albeit low-key, history of Kohlberg Kravis Roberts & Co., from a savvy Wall Street Journal correspondent who covers the leveraged buyout beat. During the merger mania of the 1980's, the tiny Manhattan- based firm of KKR wielded incredible economic power by dint of its ability to identify attractive targets and raise money to buy them. While the good times rolled, the partnership gobbled scores of sizable enterprises (Beatrice, Duracell, Lily-Tulip, Owens- Illinois, RJR Nabisco, Safeway, etc.), earning a handful of insiders and investors princely sums. As Anders makes clear, however, control changes were hard on affected companies and their employees. KKR acquisitions were invariably obliged to soldier on with austerity budgets, debt-burdened balance sheets, and greatly reduced payrolls; as often as not, they also had to make do without crown-jewel assets that had been stripped to recoup upfront funds, pay off lenders and advisors, or simply enrich the deal's ground- floor participants. While Anders doesn't portray KKR principals Henry Kravis and George Roberts as villains of the piece, he leaves little doubt that the gracious, if predatory, cousins put no stock in the human costs of their maneuverings but simply played the great game of an era harder and better than their rivals. Overtaken by events and public opinion, moveover, they've now become apostles of the principle of equity over debt. And for all the lost jobs, closed plants, disrupted lives, and allied upheavals, Anders concludes, the heyday of casino capitalism was essentially a wash from a macroeconomic standpoint. A thoughtful audit of a consequential Wall Street partnership and its impact. The text, proofs of which were sent to reviewers minus a ``sensitive'' chapter on KKR's interim woes with its RJR Nabisco properties, has 16 pages of photos--not seen. -- Copyright ©1992, Kirkus Associates, LP. All rights reserved.

Book Description
Story of Kolberg Kravis Roberts.


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Kohlberg Kravis Roberts & Co. (KKR) was founded in New York in 1976 by three enterprising investment bankers, Jerry Kohlberg, George Kravis, and George Roberts, with the simple purpose of assisting companies to participate in management-led buyouts or leveraged buyouts (LBOs). While its origins were humble, KKR's lifespan to date has not been, having spent almost $60 billion in 38 buyouts of companies, which resulted in a reshaping of corporate America. Wall Street Journal reporter Anders chronicles the rise of KKR during the 1980s, the ``age of debt,'' and shows how a simple formula using borrowed money could be successfully repeated over and over again in corporate takeovers, bringing untold wealth and power to the men of KKR and to their investors. The pinnacle of success for KKR was the RJR Nabisco buyout in 1989 costing $26.4 billion (this is covered at length in Bryan Burrough and John Helyar's Barbarians at the Gate , LJ 1/90). Unfortunately, the free-spending 1980s gave way to the recessionary 1990s, and KKR's fortunes similarly declined, with its partnership unraveling. This compelling book is recommended for all business collections.-- Richard Drezen, Merrill Lynch Lib., New York


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