The roots of Avago Technologies Ltd. go back to the early 1960s when it was a part of Hewlett-Packard (NYSE: HPQ). Since then, the company has been spun out (in 1999) and even underwent a leveraged buyout -- with the private equity sponsors of KKR and Silver Lake (in 2005). They both own about 80.9% of the outstanding shares.

Now, Avago is prepping to become a public company again. Although, in light of the current state of the markets, the deal could be a tough sale.

Avago develops a wide range of analog semiconductor devices (the portfolio includes about 7,000 products). There are more than 5,000 patents on the technology.

Moreover, Avago's base is extensive, with about 40,000 customers across the world. For the past 12 months, the company posted revenues of about $1.527 billion.

Interestingly enough, one of the underwriters on the public offering is KKR Capital Markets. Yes, this is KKR's attempt to diversify its business platform. No doubt, this will be a critical test case as KKR plans to become a public company in Q4.

If you want to learn more about the public offering, you can find the prospectus at the SEC website.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

With its plans to become a public company in Q4, the folks at KKR have a lot on their plate. However, the company realizes it needs to keep bolstering the firm.

In light of the credit crunch and slowing economy, this is a tough thing. After all, much of KKR's business comes from its buyout business, which has been mostly frozen for the past year.

But, KKR understands that private equity is a long-term proposition, and there are certainly some great investment opportunities. One attractive area is infrastructure. In fact, in May KKR announced plans to raise a $10 billion infrastructure fund and retained a top Lazard (NYSE: LAZ) executive, George Bilicic, to manage things.

Well, this week there was more activity on this initiative. KKR retained John Bryson as a Senior Advisor. No doubt, he's a maestro about infrastructure. He was formerly the CEO of Edison International (he joined the firm in 1984) where he had to deal with complex regulations as well as find ways to grow operations. Before this, he was a partner at the law firm, Morrison & Foerster and even served as the president of the California Public Utilities Commission.

Of course, KKR is facing lots of competition in the infrastructure category, such as from other tier-1 private equity operators and even sovereign wealth funds. Take a look at TPG, which has recently made a preliminary $6.5 billion bid for Australia's Asciano (a port and rails firm).

Yet, infrastructure is a massive space with room for many players. More importantly, private equity firms are bulging with cash and need to find places to put it.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

TheStreet.com's Jim Cramer says KKR will join the list of buyout firms that fleece the small investor by going public.

Just what we need, a private-equity firm to go public. That worked just great with Fortress Investment (NYSE: FIG) (Cramer's Take), and it was terrific with Blackstone (NYSE: BX) (Cramer's Take). At least this one is some sort of reverse merger that might not inflict too much pain on the public.

Of course, folks in this business are displaying their usual lack of shame. It would be an excellent time for them to have a good reason beyond employee retention; I mean if you are making all of that money, what's the issue with retention? It would also be terrific if they were doing well, but there hasn't been a deal in so long that it would be a bit of an oddity if they were doing anything other than making a lot of fees.

But Kohlberg Kravis Roberts is a storied lot, so I figure the public will lap it up and all will be well until the losses start.

Or maybe this will be the one that's in the blue moon and the public will not be pants'd by the really smart bankers.

The New York Times reports that Kohlberg Kravis and Roberts (KKR), the most famous of the private equity firms, is now ready to part with its private status -- a year after it watched Blackstone Group (NYSE: BX) go public and promptly lose half its value.

The Times reports that KKR already has a public affiliate, KKR Private Equity Investors, which is listed on the Euronext in Amsterdam. KKR will buy that for $3.9 billion. This complex deal will value KKR at between $12 billion and $15 billion. The deal will put 21% of the firm's shares in public hands while KKR executives will own the other 79%.

How do we know that KKR's IPO won't lose half its value as Blackstone's did? We don't. But KKR executives won't be able to sell their shares at the offering -- according to the Times, KKR executives will have a "six- to eight-year vesting period compared with Blackstone's three- to four-year period." And once KKR is public, independent directors will control it; whereas inside directors run Blackstone.

I'm sure KKR is irked that the Blackstone Group LP (NYSE: BX) is public. In fact, the company had its IPO at the peak in the market, picking up billions from investors. And, since the transaction, Blackstone has used its stock to pull off deals, such as the purchase of GSO Capital.

But, according to a piece in the Wall Street Journal (subscription required) it seems that KKR is still gunning for a public offering. True, KKR did file an S-1 about a year ago. But, the last amended filing was in November.

Then again, KKR has been on a hiring spree – bulking up its executive suite. Some of the positions include: general counsel, chief compliance offer, CTO, chief human-resources officer and so on.

In other words, why have such people unless a company wants to be public?

If anything, the lull in the private equity market may be a blessing. Keep in mind that KKR hasn't struck a buyout deal this year. So, what better time than now to build up the infrastructure?

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

In the rarefied world of private equity, there is a well-known PR operator: Kekst & Co Inc. Founded in 1970, the firm has a sterling client list, which includes biggies like KKR. No doubt, it's a complex specialty, which requires a strong understanding of securities regulation and shareholder relations.

Well, Kekst is selling out to Publicis Group, which is a global advertising and marketing firm. The price tag was not disclosed.

Kekst has a storied past. For example, the firm was involved in the leveraged buyout of RJR (back in the late 1980s). Kekst is also advising Anheuser-Busch Companies Inc. (NYSE: BUD) on its fight against InBev.

This post is part of a series on some of the most memorable companies that have disappeared.

The number of brands associated with food processing giant Beatrice Foods was many and varied, including Airstream, Altoids, Avis, Blue Valley, Butterball, Culligan, Ekrich, Good & Plenty, Hunt's, Jolly Rancher, Krispy Kreme, La Choy, Meadow Gold, Orville Redenbacher, Peter Pan, Playtex, Reddi Wip, Samsonite, Swiss Miss, Tropicana, Wesson and World Dryer. Not bad for a small egg and milk packager in Beatrice, Nebraska, that in 1894 named itself after the former occupant of the building it leased.

In 1913 the company moved to Chicago, and by the 1930s it was a leading dairy in the U.S. The post-war baby boom was a boon for Beatrice, which doubled its sales between 1945 and 1955. Expansion continued through the 1970s, and by 1984, annual sales were about $12 billion.

Shortly thereafter, private equity firm Kohlberg Kravis Roberts (KKR) acquired a controlling stake in Beatrice through a leveraged buyout. Over the next few years, KKR sold off Beatrice assets. In 1990, what remained of Beatrice was sold to ConAgra Foods (NYSE: CAG).

The disk drive business isn't exciting. But, it does generate nice cash flows.

So, over the weekend, KKR announced that it is buying Unisteel, which is a disk drive component developer in Singapore. There were other bidders at the table, such as the Carlyle Group, TPG, and Bain Capital.

The price tag: $578 million.

Unisteel is listed on the Singapore exchange. Because of low trading volume, there are many bargains to pick from -- which should be attractive to private equity players.

Also, from a strategic standpoint, the Unisteel deal is another sign of the consolidation in the global disk drive market. Essentially, scale is incredibly important.

Interestingly enough, KKR purchased MMI Holdings -- another disk drive operator -- about a year ago. So, by combining MMI and Unisteel, there should be some juicy cost savings.

Moreover, keep in mind that KKR will continue to focus on Asia. After all, the firm recently raised a $4 billion fund that is focused on the region.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

Lately, there have been some scary stories -- such as in BusinessWeek and Forbes.com -- about the buyout of Freescale, which is a major semiconductor operator (the transaction came in September 2006 at $17.6 billion).

The latest earnings report was anemic. Plus, the company's bonds are selling at distressed levels. In fact, the CEO -- Michel Mayer -- quit his post in February (but don't cry for him as he took millions in a nice payday). And of course, Freescale's key customer, Motorola, Inc. (NYSE: MOT), is ailing.

So, might this prevent further buyout deals in the semiconductor space?

KKR Financial Holdings LLC (NYSE: KFN) is a pioneer of the private equity world. However, over the past few years, things have changed significantly. Besides the credit crunch, dealmakers must also deal with the complexities of politics. After all, a buyout can have a major impact on a community -- in terms of jobs and the ecosystem.

Realizing this, KKR is bulking up its political heft. This week, the firm announced that it has hired Kenneth Mehlman as a managing director and head of public affairs.

Mehlman has a strong resume, having served as the chairman of the Republican National Committee. He was also the campaign manager for President George Bush in the 2004 election. The latest gig for him was as a partner at Akin Gump. Interestingly, one of his top clients was KKR.

MOST NOTEWORTHY: American Capital, Realty Income and KKR Financial were today's noteworthy downgrades:

• Jefferies downgraded American Capital (NASDAQ: ACAS) to Underperform from Hold as they see a disproportionate risk profile in the company's current portfolio when compared to most peers.
  
• Banc of America cut Realty Income (NYSE: O) to Sell from Neutral as they believe the current valuation is not sustainable.
  
• Bear lowered KKR Financial (NYSE: KFN) to Peer Perform from Outperform following the company's announcement that it intends to sell 20M shares in a public offering.

OTHER DOWNGRADES:

• Goldman cut PepsiCo (NYSE: PEP) to Neutral from Buy.
  
• RBC Capital downgraded Avocent (NASDAQ: AVCT) to Sector Perform from Outperform.
  
• JP Morgan removed NICE Systems (NASDAQ: NICE) from its Focus List.

With the severe credit crunch, the private equity world has come to a screeching halt. Sure, there is some dealmaking – but nothing like it was just a year ago.

So, what are the private equity folks doing? Well, they are raising billions of dollars. This is according to a piece in the FT.com (subscription required).

Although, the typical investors in private equity funds – such as pension funds – are actually losing their appetites. There are concerns about lower returns as well as larger concentrations of portfolio risk. Just look at the recent write-downs at KKR.

Yet, the top-tier private equity firms are still having little trouble raising money. TPG plans to snag $15 billion and Apollo should also get the same amount. And, as for Bain and Blackstone(NYSE: BX), it looks like they'll get $20 billion apiece.

OK, so where is the big money coming from? Yep, it's the sovereign wealth funds. With bulging coffers – especially from oil – the money needs to go somewhere. And, with lower valuations and distressed companies, it could be spot-on timing for those with a long-term perspective.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates DealProfiles.com.

KKR is the firm that pioneered the private equity business getting its start in the mid 1970s. Over the years, the firm has established 14 funds and generated average returns of 20% (net of fees).

Lately, though, KKR has come under attack (as have many other private equity operators). So, when the firm's Private Equity Investors holding, which is publicly traded in Amsterdam, had its conference call recently, Henry Kravis talked about the state of private equity.

It was not an easy talk since the fund had to mark down the valuations of seven holdings. In fact, the return of the portfolio was a horrible -0.1% last year, and the fund is trading at a 38% discount to its net asset value.

Simply put, Kravis says that dealmakers will need to be creative. This means locating capital from alternative sources, such as private investors and hedge funds. There will also be more minority investments.

Kravis also stressed that KKR will continue to stick to its investment philosophy. This means focusing on companies that have stable revenues, diversified global platforms and room for operational improvement.

More importantly, Kravis said that the private equity business is about the long-term. If anything, the best opportunities are when markets are in the midst of dislocations – which is certainly the case now.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates DealProfiles.com.

MAJOR PAPERS:

• The Wall Street Journal reported that KKR Financial Holdings LLC (NYSE: KFN), a unit of Kohlberg Kravis Roberts, revived concerns of a credit crunch after it asked for a restructuring of billions of dollars in short-term debt.

OTHER PAPERS:

• According to sources, the Chicago Tribune reported that Deutsche Lufthansa AG (OTC: DLAKY) could look to take an equity stake in a merger between Continental Airlines Inc (NYSE: CAL) and UAL Corporation's (NASDAQ: UAUA) United Airlines.
• The Associated Press reported that the pilots' unions of Delta Air Lines Inc (NYSE: DAL) and Northwest Airlines Corporation (NYSE: NWA) are unable to agree on how seniority for the companies' pilots would work under a combined carrier. The impasse puts the deal in "serious jeopardy," inside sources reported.

WEB SITES:

• Electronics retailer Sharper Image Corporation (NASDAQ: SHRP) has filed for bankruptcy, citing declining sales and profitability, Bloomberg reported.

Back in late September, KKR closed one of the largest buyouts in history – the $29 billion transaction for First Data, which is a leading payments processing operator.

Even though the company is private, it is still publishing its financials and is having quarterly conference calls. So how are things going?

For the first nine months of 2007, revenues increased 15% to $5.9 billion and adjusted EBITDA was $1.8 billion (up 7%).

In fact, First Data's new CEO, Michael Capellas, also provided his go-to-market strategy – shedding some light on what happens in post-buyout environments.

First of all, he wants to find ways to increase organic growth. To this end, there will be more emphasis on bolstering the sales force – as well as finding ways to cross-sell offerings.

Next, the company wants to bring new product innovations to market (hey, it means more cross-selling, right?) Some of the areas include mobile ecommerce, analytics, and fraud detection.

Another big opportunity is the growth in emerging markets. Interestingly enough, Capellas is not looking for acquisitions to bulk things up on this front.

Finally, Capellas will try to cut lots of costs. Going into 2008, he thinks he can slash $200 million in annual costs.

And, this means layoffs – about 6% of the workforce. Yes, some things never change.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates DealProfiles.com.