Bankers are confident that the record Kohlberg Kravis Roberts has held since 1989 for the biggest ever buyout – its $25 billion purchase of RJR Nabisco – will be broken in 2006. But that will mean private-equity firms will have to band together with even more of their competitors in club deals.
Although 2005 will be remembered as a watershed year for large, club LBOs, and average deal size was the highest on record, only two buyouts passed the $10 billion mark in 2005 – the $15 billion deal for Hertz and the $11.8 billion one for Sungard. “The Sungard deal opened everyone’s horizons,” says Boon Sim, head of M&A for the Americas at Credit Suisse. “Now deals of $20 billion to $30 billion will come.”
Conditions are certainly ripe for even...
