Kkr & Co. Inc. · NYSE:KKR
Kkr & — Merger or Acquisition (July 2008)
12 slides from Kkr &'s merger presentation, Jul 28, 2008
Slide 1: Transaction Announcement Presentation July 2008
Transaction Announcement Presentation July 2008
Slide 2: Summary of Transaction
2 Summary of Transaction Consideration KPE unitholders will own 21% of combined company outstanding units at closing before giving effect to Contingent Value Interests (“CVIs”) KPE unitholders will receive CVIs, which can result in up to an additional $4.94 per unit of value, or 6% of combined compa
Slide 3: Strategic and Economic Opportunity
3 Strategic and Economic Opportunity KKR is at a unique inflection point in its growth trajectory • Positioned to benefit from investors shifting assets to leading global alternative asset managers • Leading global brand, 26.1% returns over a 32 year track record • Actively pursuing new lines of bus
Slide 4: KPE Ownership Implied Premium to KPE Market Value
4 x KPE Ownership Implied Premium to KPE Market Value Implied Premium3 82.8% 67.6% Implied Pro Forma Value per Unit2 $19.20 $17.60 KKR Run-Rate Economic Net Income1 $1,233 $1,233 Multiple 12.0x 11.0x KKR Implied Market Value $14,797 $13,564 ÷ KKR Ownership 79.0% 79.0% Implied Pro Forma Company Marke
Slide 5: CVI Provides Valuation Protection
5 CVI Provides Valuation Protection $ in millions, except per unit price (1) Equals KPE NAV as of 30-Jun-2008 (2) Assumes no distributions (3) Based on $10.50 KPE unit price as of 25-Jul-2008 and three year term. IRRs are illustrative and see “Forward Looking and Illustrative Information,” page 11 C
Slide 6: KKR Today
6 KKR Today Founded in 1976, KKR is one of the world’s oldest and most successful alternative investment firms with $61bn of AUM • 98% of AUM is locked up for 10+ years Global firm with over 500 employees in 9 offices globally Three core businesses • Private Equity • Fixed Income • Capital Markets F
Slide 7: Diversified Alternative Asset Management Platform With Significant Scale
7 Diversified Alternative Asset Management Platform With Significant Scale KKR Fixed Income Assets Under Management2 ($13.1bn) KKR Principals 79% KPE Unitholders 21% + CVI Fees & Carry Fees & Carry Fees Capital Appreciation Private Equity Invested 3rd Party Capital1 ($24.3bn) Uninvested, Committed 3
Slide 8: Investment Portfolio of 46 World-Class Franchises
8 ($ in millions) Sep-07 $ 2,325 May-07 2,129 Dec-02 2,092 Oct-07 1,842 Jul-07 1,118 Nov-06 1,099 Jul-07 1,017 Jul-07 997 Sep-06 850 Jan-08 817 Total $ 14,286 Date of Investment Fair Value (as of 31-Mar-2008) Investment Portfolio of 46 World-Class Franchises $205bn of Revenue and 855,000 Employees O
Slide 9: When modeling exit strategies, 91% of portfolio assumed lower multiple at exit
9 When modeling exit strategies, 91% of current portfolio assumed lower multiple at exit than entry Historically, approximately 15% of KKR’s value creation has come from multiple expansion, with EBITDA growth and deleveraging accounting for the remaining 85% Operational approach drives value in all
Slide 10: Rationale for the Transaction
10 Rationale for the Transaction KPE Unitholders Opportunity for significant implied premium based on market comparables Increased liquidity through NYSE listing and expanded investor base Access to diversified and recurring asset management fee and carry streams from long-dated asset base Opportuni
Slide 11: Forward Looking and Illustrative Information
11 Forward Looking and Illustrative Information This presentation contains certain forward-looking statements. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not hi
Slide 12: Offering Information
12 Offering Information This presentation is being made in respect of the proposed transaction involving KKR and KPE. In connection with the proposed transaction, KKR will file with the SEC an amendment to its existing Registration Statement on Form S-1 (file no. 333-144335) and will be filing other