KKR gets some juice from the Oracle/Sun deal

Posted Apr 21st 2009 9:30AM by Tom Taulli
Filed under: Private Equity, Sun Microsystems (JAVA), Oracle Corp (ORCL)

Back in early 2007, KKR Private Equity Investors -- along with Citigroup (NYSE: C) -- invested $700 million in Sun Microsystems (NASDAQ: JAVA). The investment structure was a convertible senior note (both firms split the investment).

And, just like many other private equity deals, KKR wrote down the investment -- by about $167 million. This was as of last year.

Well, in light of Oracle's (NASDAQ: ORCL) announced $7.4 billion buyout of Sun yesterday, there is a nice surprise for KKR. You see, according to the note agreement, KKR is entitled to get its investment repaid. In fact, this also includes payment of accrued interest, according to Reuters.

Of course, this transaction seems somewhat mediocre. But, in light of the wreckage for many private equity deals over the past couple years, this one actually looks like a home run.

Tom Taulli is the author of various books, including The Complete M&A Handbook and the founder of BizEquity, a free online business valuation tool for small businesses.

Tags: inthenews, java, KKR, orcl, private equity, PrivateEquity