KKR Prepares for Test of Credit Markets

Fate of pending deals may foretell future of private equity
By Sam Gale Rosen,  Newser Staff
Posted Sep 11, 2007 8:17 AM CDT
The TXU headquarters sign is shown in downtown Dallas, Tuesday, May 8, 2007. Electricity provider TXU Corp., which agreed to a $32 billion buyout led by KKR and Texas Pacific Group, said Wednesday it...   (Associated Press)
camera-icon View 1 more image

(Newser) – Kolhberg Kravis Roberts is pushing forward with some of the biggest deals in US history, but the iconic buyout firm finds itself under unprecedented scrutiny. Analysts say the huge deals KKR has pending will be a test of the struggling credit markets, the Washington Post reports: If they don't go through, the age of private equity may be over.

Pending deals for TXU and First Data loom as bellwethers for KKR. One insider tells the Wall Street Journal First Data is "the canary in the coal mine. If it gets done, then another $350 billion is doable. But if not, then the whole market may plunge, and the rest of the capital markets will react badly."