Dollar General, a discount retailer owned by private equity firm Kohlberg Kravis Roberts & Co., has to sell stock through an initial public offering. The Tennessee chain–which sells bargain-bin items–has been the most successful of KKR’s investments made during the buyout boom in 2006 and 2007, when the firm also acquired stakes in Texas utility TXU and media-research firm Nielsen. According to The Wall Street Journal, Dollar General plans to sell as much as $750 million in stock; the registration amount is used solely to calculate SEC filing fees, so the total the company actually raises could be different. If it does come close to selling that amount, however, Dollar’s deal would be the largest operating-company IPO so far this year. In connection with the deal, KKR will pay itself and its investors a $200 million dividend. The New York private-equity firm will also be one of the underwriters on the deal, helping sell off the shares and earning extra fees for itself in the process. The firm recently struck a deal to distribute its IPO to clients of Fidelity Investments, the mutual-fund giant. The IPO comes as KKR prepares for its own long-awaited public listing in October. Discounters like Dollar General have done well in the recession as customers trade down to cheaper merchandise.
KKR to Hold IPO of Dollar General
KKR prepares for its public listing in October and will hold IPO Dollar General, one of the companys most successful investments made during the recession.
August 21, 2009