Having teamed up with Japanese conglomerate Itochu, KKR’s $7.2 billion bid for Samson is thought to be the second largest in 2011, beaten only by the Blackstone Group’s $9.4 billion acquisition of 600 shopping malls from Australia’s Centro Properties.
The deal, which is expected to be announced today, would see KKR taking a 60 percent stake in Samson and Itochu buying 25 percent. Other private equity investors, led by NGP Energy Capital Management and Crestview Partners, would take the remaining 15 percent.
KKR declined to comment on the deal. NGP and Crestview could not be reached by press time.
Based in Tulsa, Oklahoma – also hometown to KKR co-founder and co-chief executive Henry Kravis – Samson operates over 4000 wells across North America. The business also has operations in the Gulf of Mexico, although these will not be part of the deal.
KKR’s pairing up with a Japanese company reflects the firm’s increasing confidence in Japan's business community. At a recent conference in Hong Kong, Kravis spoke about the Samson deal and how Japanese businesses were now more open and efficient in dealings.
Without disclosing specifics about the deal, Kravis said: “[It was] Very uncharacteristic of Japanese historically, [as] within two days they had 20 people from Japan and from London and New York down south where this company is located.”
The acquisition also reflects Japan’s eagerness to pursue foreign M&A transactions. For example, in May this year, Japanese business Takeda Pharmaceutical Company acquired Nycomed from Nordic Capital and co-investors Avista Capital Partners, DLJ Merchant Banking (the buyout arm of invest bank Credit Suisse) and Coller International Partners in a blockbuster €9.6 billion exit for the private equity firms.
This week KKR has been active across the globe, yesterday acquiring a 12.5 percent stake in car parking and logistics business Saba Infraestructuras. The firm has also recently launched its second Asia fund for which it is targeting $6 billion.