Kohlberg Kravis Roberts’ mezzanine team has exited one of its largest investments to date, RBS Worldpay, generating a return of around 17 percent, according to sources with knowledge of the transaction.
KKR Mezzanine also recently exited its investment in specialty chemical distributor IMCD Group, reaping a return of about 14 percent, sources said.
KKR confirmed the exits, but would not discuss financial details. The exits come as the firm works its way through its debut mezzanine fund, KKR Mezzanine Partners, which closed on about $1 billion in 2011. That fund is about half deployed, Marc Ciancimino, head of the mezzanine team, told Private Equity International in an interview Tuesday. Ciancimino became head of the team earlier this year after former chief Fred Goltz decided to step down after 18 years at the firm.
The RBS Worldpay investment was attractive at the time because “it was a carve-out and did not have sufficient audited financial statements to go down the high yield route”, Ciancimino told PEI in a prior interview.
The KKR-led financing helped the private equity sponsors “get the deal over the line”, Ciancimino said. “It was a successful deal from our point of view. Our thesis behind the underlying stability of the business and scope to grow and develop it through acquisitions played out.”
Meanwhile, the firm also exited its investment in Netherlands-based IMCD, which markets, sells and distributes specialty chemicals. In 2011, KKR led a consortium that injected €105 million of mezzanine financing in Bain Capital’s acquisition of IMCD, which was a business Ciancimino said he knew well.
“I had invested in the business seven or eight years ago in a previous fund, I knew the business and management team well,” he said.