What's KKR Up to – Strategic Plans?
www.boardpost.net/forum/index.php?topic=4674.msg51242#msg51242
Zitat investorwad:
Mornin', Judge. I believe the business continuity constraint of the IRC expires after the two year period so WMIH really isn't stuck in the reinsurance or even broader finance category. Your "simple lawyer brain" is right about considering profit and tax relating to potential acquisition targets because of the influence our NOLs have on both. The rest of what you ask would indeed have to be stabbed at by an expert in those fields. Sounds complicated.
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Zitat Devalzadvok8:
El Juez,
"I like that it's in reinsurance (makes the IRS happy, since that currently is WMIH's only real business), but as a Bermuda-domiciled insurance company doesn't Nephela already operate without corporate income tax under that country's peculiar laws? I get that KKR still has to pay income taxes on it's profits on its Nephala investment, but I don't get completely how things could be structured that would take advantage of our NOLs."
As long as Nephala's current existing accumlated 'profit' is off shore and in Bermuda it probably isn't taxed. I have seen arguments here as to using the NOLs as a 'technique' to bring overseas profits home [which would be taxed otherwise] tax-free. Can't remember whether the discussions were on the old 'Ghost' board or this one.
If such a technique were applicable it would be an instant boost for WMIH. Am not a tax expert, so maybe someone else here might be able to dwell on this aspect a bit..........
Dev
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Zitat kenwalker:
RIMS longstanding policy opposes efforts to penalize domestic insurers with foreign affiliates by imposing limits on the tax deductibility of reinsurance premiums ceded by domestic insurers to their affiliates. In previous congresses, Rep. Richard Neal (D-MA) has spearheaded these efforts on behalf of a few domestic insurance companies. Last Congress (the 111th Congress), Rep. Neal introduced H.R. 3424, which would impose a penalty and tax on reinsurance that a foreign-owned U.S. insurance firm buys from an offshore affiliate. Earlier this year, the Obama Administration, as part of its 2012 fiscal year budget, proposed a similar onerous tax. Currently, there is no actual legislative proposal from the Obama Administration proposal nor has Rep. Neal reintroduced legislation (It is expected that he will shortly). (A few years ago, Senate Finance Committee Chair Max Baucus (D-MT) circulated a draft similar to Rep. Neal’s bill, but it was never formally introduced.) RIMS is on record in opposition to all these initiatives. RIMS is a member of the Coalition For Competitive Insurance Rates (CCIR), which opposes this legislation and the Administration’s proposal.
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ZItat det_sherlock:
Thanks, Ken—the RIMS site [Risk & insurance Management Society], contains good tutorials on insurance, reinsurance, captives.
KKR’s M.O. is clear--they consistently maximize synergy between businesses. One business feeds the other--they buy businesses that can receive business from their many other owned companies. Thus, giving their owned companies the best prices on services, while making a profit on the owned company that delivers the services.
Viewing KKR's recent activity--amassing a new real estate fund, buying more real estate [in a recently depressed market filled with bargains], buying out its own KFN credit business, and buying an insurance broker—I see this as potentially the most promising area for WMIH involvement. But it's anybody's guess.
We’ve often asked, “How long does it take for the WMIH Board…” To acquire a $1.6 billion business--that TPG and Blackstone were also trying to buy--it took KKR a two-month sale process, and deal is expected to close by the end of this year. Time elapsed, from sales process to close, 3-1/2 months.
Below, more puzzle pieces, including ASIA, and more ways one business feeds the others to make all prosper.
ASIA—RIPE FOR EXPANSION?
KKR has a long history in oil/gas and energy resources, and in October 2013 they bought another business that ‘feeds’ their energy operations—a Malaysian Aviation company offering offshore helicopter transport for oil/gas companies. In 2010 they invested in a Spanish chopper service that offers life-saving/rescue services [44% of revs] and energy transport services [21% of revs].
[1] “…KKR’s investment [in Malaysian Aviation co.] is being made from its $6 billion KKR Asian Fund II, according to the statement. In January, the firm more than doubled its investment in Masan Consumer Corp., a Vietnamese fish sauce maker, to $359 million, currently its biggest in Southeast Asia.
“…KKR has seven offices in the Asia-Pacific region. Singapore is home to the firm’s headquarters for Southeast Asia, where it has invested $1.5 billion since 2005.”
BEEFING UP REAL ESTATE / CONSTRUCTION RELATED
This November KKR bought national landscaper Brickman for $1.6 billion from an owner who paid $847 million for it in 2005. It’s described as one of the country’s largest landscaping companies [10,000 employees] that “provides services including landscape maintenance and enhancement, water management and tree care.” The deal is expected to close by the end of this year.
[2] “…Private-equity firms are investing in landscaping businesses as construction picks up following the financial crisis.”
“…U.S. housing starts have risen 19 percent in the past year, according to national data released Nov. 8.”
[2-3] “…Leonard Green [Brickman owner] had fielded offers from other parties, according to a Brickman spokeswoman, during a sale process that lasted about two months. Early reports from Reuters indicated that two other private equity firms, TPG Capital and the Blackstone Group, were among the firms in the running...”
“…Credit Suisse Securities and Simpson Thacher & Bartlett advised K.K.R.”
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Wasn't Simpson-Thacher active in our BK? I recall CSNY singing their praises but thought I remembered on the opposing team.
IDEA—10,000 employees in just one recent acquisition. How many employees are encompassed by all KKR companies? Real Estate development/construction and oil/gas are injury-prone industries. Do they need to throw their Workers’ Comp into a captive? Or do they already have one, or two, or a dozen captives? [See RIMS tutorials on captives, workers comp.]
I’m sure KKR’s website would provide a lot of additional puzzle pieces—I haven’t even looked there yet, dealing only with recent news activity. If we could chart a ‘family tree’ of companies it might be revealing. What gaps could a flexible, clean-slate shell like WMIH fill? What business units need to be consolidated and put into a WMIH?
det
SOURCE 1 –
KKR Buys Weststar Aviation Stake in First Malaysian Foray, by Cathy Chan, Joyce Koh and Manirajan Ramasamy Oct 10, 2013 12:45 AM ET - www.bloomberg.com/news/2013-10-09/...malaysian-investment.html
SOURCE 2 -- KKR Agrees to Buy Landscaper Brickman for $1.6 Billion, by Devin Banerjee, 11-11-13, Bloomberg – www.bloomberg.com/news/2013-11-11/...kman-for-1-6-billion.html
SOURCE 3 – K.K.R. to Buy Landscaping Company Brickman for $1.6 Billion, by Rachel Abrams, 11-11-13 - dealbook.nytimes.com/2013/11/11/...ckman-for-1-6-billion/?_r=0
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Zitat lottosorteo:
My thoughs:
Is good for a company like KKR who has (and is acquiring), big fix assets, building shopping, and oil explorations). Since each of these business are insured and need to be re-insured, there is a business for KKR, since they could gain from the reinsurance business.
On top of that re-insurance companies make a lot of cash (when there is no disaster).
Also expect property values to go up in the future years (coherent with Blackstone recently real state purchase activity.)
In this case WMIH (tax advantage), could add value against KKR profits, (and cash) and reading about the size of KKR, it may be fast.
I am not an accountant, I wonder how WMIH tax advantage will play on KKR given that KKR cannot buy more than 42.5% (minority interest) of WMIH.
KKR may purchase WMIH, with stock or cash. So the question is how much is worth WMIH? or how much is worth for KKR, WMIH NOL?
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is schon Witzig ... das erzählt faster schon seit monaten ! wie groß ist der Wert der NOL!!!!! keinen juckt`s ...
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Zitat kenwalker:
lottosorteo: So the question is how much is worth WMIH? or how much is worth for KKR, WMIH NOL?
KKR is limited to 42% and in the same sentance ( If I remember correct ) also limited to 1 billion dollars so, I would take from that they "value" us around 2.3B. A lot we don't know from PR but ...................:
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Zitat investorwad:
I believe the IRC restrictions still prevent an outright purchase of WMIH which is why we see this initial funding structured the way it is including the 42% max KKR ownership.
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Zitatende
MfG.L:)
Alles nur meine pers. Meinung, kein Kauf- oder Verkaufs-Empfehlung!
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