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KKR in 3x exit to Blackstone and Goldman Sachs

The sale of Ipreo comes three years after KKR acquired the financial software company from VSS.

Kohlberg Kravis Roberts will sell financial data and software company Ipreo to The Blackstone Group and the Goldman Sachs Merchant Banking Division for a reported $975 million.

KKR declined to disclose financial details, but a source with knowledge of the situation said the exit will generate roughly a 3x return multiple. Following completion of the transaction, KKR will retain a minority stake in the business, which it acquired from Veronis Suhler Stevenson for a reported $425 million in 2011. Ipreo was created in 2006 when VSS merged its UK-based portfolio company Hemscott Group, a provider of financial data and investor relations services, with i-Deal, a capital markets workflow services company.

Financing for the transaction is being provided by Goldman Sachs, BofA Merrill Lynch, Credit Suisse, Deutsche Bank, Morgan Stanley and RBC Capital Markets.

Under KKR’s ownership, Ipreo has grown revenues by about 50 percent and more than doubled EBITDA. KKR also helped the company complete multiple add-on acquisitions, open a new operation in Raleigh, North Carolina, and increase employee headcount by about 20 percent.

The investment by Blackstone comes one week after the firm acquired Denver-based Gates Corporation, a division of UK engineering company Tomkins, from the Canada Pension Plan Investment Board and Onex Corporation for about $5.4 billion. Blackstone is currently investing its Blackstone Capital Partners VI fund, which closed on $16.27 billion in 2012.