KKR Stretches Its Dollar to Boost Industry’s Rep

ByMichael Wursthorn

Kohlberg Kravis Roberts & Co.’s ownership of the discount retailer Dollar General Corp. has found another use besides being a buyout success for the firm.

The Goodlettsville, Tenn.-based Dollar General is featured as the latest case study in the Private Equity at Work campaign, a public relations effort by  lobby group the Private Equity Capital Growth Capital Council to put a positive spin on the buyout industry in the wake of the harsh political rhetoric following the asset class in this election.

The video showcases KKR’s acquisition of the retailer, covering the initial investment to the growth seen over those years under the New York-based firm. More importantly, the video attempts to dispel the claim that private equity busts and gut companies instead of growing them.

“Private equity, the good investments, are really driven by improving and growing a company, not by stripping down,” said Mike Calbert, head of KKR’s retail industry team, in the video. 

The PEGCC highlights Dollar General’s 56% revenue growth between 2007 and 2011, the creation of 20,000 new jobs and a footprint of 10,000 stores.

In 2007, KKR led the retailer’s 2007 buyout, which cost $7.2 billion at the time. Dollar General floated again in 2009, with the firm selling a small portion of its stake then.

The real gains in KKR’s investment have been seen over a series of secondary stock sales, including a planned partial exit through a sale of 36 million Dollar General shares. That stock sale will see KKR reduce its interest from 34% to at least 22%.

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