Barons of the Big Buyout

An upstart investment firm reaps a fortune from heavy leverage

Not all of today's big dealmakers operate with the high profile of a T. Boone Pickens or a Carl Icahn. Case in point: Kohlberg Kravis Roberts, a clannish, almost obsessively reclusive investment-banking firm that often determines the fate of giant corporations. Kohlberg Kravis is Wall Street's master of a generally friendly form of takeover, the leveraged buyout. In an LBO, a small group of investors buys a company's stock with mostly borrowed money and takes the corporation private. Last week Kohlberg Kravis and a group of outside investors announced that they would do an LBO of the largest U.S. supermarket chain,...

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