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KKR Goes Back to Europe

Kohlberg Kravis Roberts & Co. is beginning to talk to LPs about raising its next European fund, following a spate of big-ticket overseas buyouts. We haven’t yet heard a specific target, but it’s likely to be much larger than its previous EUR 4.5 billion vehicle.

At least one major LP told Buyouts Magazine it would be meeting later this month with KKR to discuss re-upping in the fund. A spokesman for New York-based KKR declined comment.

KKR closed its previous European vehicle in October 2005, crushing an original target of Euro 1.5 billion. It raised its first European fund in 1999, with $3 billion in commitments.

Backers of the last fund included CPP Investment Board, CalPERS, HarbourVest Partners, the State of Michigan, Oregon State Treasury, South Dakota Investment Council, and Washington State Investment Board. Oregon and Washington reportedly put $500 million each into the second fund.

The $21 billion pending Alliance Boots deal is far from the only sizeable transaction KKR has been a part of. It clubbed with other buyout firms to buy Danish telecommunications company TDC A/S for $10.6 billion in late November 2005, then bought Dutch publisher VNU NV for $11.3 billion in January 2006, completing the two deals in the space of 6 weeks.

KKR bought debuted in Europe 11 years ago and has since established itself as one of the top sponsors there, particularly in Germany. There, portfolio companies include auto parts retailer A.T.U Handels GmbH & Co KG, waste manager Duales System Deutschland GmbH, forklift truck maker Kion Group and television broadcaster ProSiebeSat.1 Media AG.

Other notable holdings are Le Grand Electric, a Limoges, France-based electrical company with 31,000 employees; Maxeda, a retailer with 1,700 stores across Europe and almost €4 billion in sales, and Netherlands-based NXP, the former Philips Semiconductors.

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