KKR eyes private credit to finance FGS Global acquisition

KKR is reported to be in the early stages of securing $500m (£389m) of debt from private credit lenders to finance its acquisition of public relations firm FGS Global.

According to Bloomberg, the New York-based investment giant plans to increase its stake in the business to about 80 per cent from 30 per cent.

The deal, announced last month, saw KKR value FGS at $1.7bn and agree to buy the extra 50 per cent stake from British advertising agency WPP for $775m.

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The transaction is expected to close by the end of the year, subject to regulatory approvals and other customary closing conditions.

Private credit funds are increasingly moving in on the upper end of the middle market, clawing market share away from banks despite the recovery of the broadly syndicated loan market and high-yield bonds. While public credit is competing on pricing at the moment, private credit can offer greater flexibility and speed for sponsors, according to industry experts.

The acquisition follows news that KKR plans to use private credit for the acquisition of Finnish software company Accountor.

Last month, KKR announced that it had raised $32bn (£24.9bn) in the second quarter of this year, the second highest quarter in the firm’s history, bringing assets under management (AUM) to over $600bn.

Adjusted net income rose 49 per cent year-on-year to $972m, while fee-related earnings rose by 25 per cent year-on-year to a record $755m.

The group’s total AUM amounted to $601bn, up 16 per cent year-on-year.

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