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KKR files for PanAmSat IPO only months after acquisition

KKR and its co-investors in satellite business PanAmSat have filed to list shares in the company worth around $1bn only months after acquiring the business. The IPO would be the latest in a series of quick exits for private equity firms eager to take advantage of accommodating public markets.

KKR, Carlyle and Providence Equity Partners completed their purchase of the satellite operator in the summer, paying more than $4bn including debt. KKR has a 43.5 per cent stake, while the other two firms have 26.9 per cent each.

Private equity firms have rushed to buy satellite assets over the past 18 months, attracted by their predictable cash flows, high barriers to entry, and long-term customer contracts. They have also often been able to negotiate aggressively with vendors under some financial pressure to pay down debt accumulated during the technology and telecoms bubble.

Other quick turnarounds in recent months have included Blackstone-backed businesses Foundation Coal, Ondeo Nalco and Celanese.

Private equity firms usually endeavour to spend more time on their portfolio companies to achieve some material improvement in the workings of the business, and thus its value. But they are also opportunistic enough to recognise when the public markets will provide them with a profitable way out of their investments in a much shorter space of time.

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