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Industry Analysis Case Study

Case Title:

Private Equity Companies: The Strategic Shift

Publication Year : 2008

Authors: Sidhdharth Purohit, Shahnaz Hussain, Joel Sarosh Thadamalla

Industry: Banking, Insurance and Financial Services


Case Code: INA0113A

Teaching Note: Available

Structured Assignment: Available

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Kohlberg Kravis Roberts & Co. (KKR) and Texas Pacific Group, one of the leading private equity (PE) firms announced a $45 billion acquisition of Texan Energy Utility (TXU), an energy generation company in February 2007. In the past PE firms followed a strategy to buy loss-making businesses and sell them after exercising management and financial restructuring. The announcement made by KKR to produce energy without damaging the environment signaled a strategic shift in how private equity businesses operated. The case discusses the challenges raised by the environmental groups and the dynamics of private equity business as a whole. It also attempts to trace private equity companies' strategic shift in acquiring businesses.

Pedagogical Objectives:

  • To understand dynamics of private equity business
  • To evaluate the growth strategy of KKR
  • To understand shift in strategy of private equity companies and it impact.

Keywords : Private Equity; Mergers and Acquisitions; Leveraged buy-outs; Kohlberg Kravis Roberts & Co. (KKR); Texan energy utility (TXU); Blackstone Group; Carlyle Group; Newbridge Group; Restructuring - Turnaround Strategies Case Study; Private Equity Industry Guidelines Group; Securities and Exchange Commission; Barbarians at the Gate; Dynamics of Private Equity Business

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