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KKR, Bain Capital groom Toys “R” Us and HCA for IPOs

9 Apr 2010

US private equity firms KKR and Bain Capital are readying toy retailer Toys “R” Us and hospital chain HCA Inc for initial public offerings, according to the Wall Street Journal.

The IPOs are expected to take place in the coming months, as long as the markets continue to thaw. KKR and Bain were two of the most acquisitive mega buy-out firms during the private equity boom, and are now hoping to return cash to investors, as well as to clear some of the debt from the takeovers.

If the listings go to plan, they could be some of the largest private equity-backed IPOs since the markets started to rally. HCA, which was acquired by the duo in 2006 for $21.3bn, could raise over $3bn in an IPO, which would make it the largest US flotation in several years, and follows on the heels of a $1.75bn dividend the firms paid themselves in January after HCA reported a strong 2009 performance.

A successful Toys “R” Us listing would signal the turnaround of the once-troubled retailer. Bain and KKR acquired the company in 2006 for $6.6bn, alongside New York real estate investor Vornado Realty Trust. The acquisition was widely seen at the time as a rescue, as the company had reportedly been considering breaking up its toy empire. The chain posted strong results last month, indicating that the turnaround may have been successful.

The firms are also reportedly readying Dutch semiconductor firm NXP for a listing. The company posted sales of $5.4bn in 2008, and is expected to raise up to $1bn in the event of a flotation.

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