Upcoming AWS Coverage on Athene Holding Post-Earnings Results

LONDON, UK / ACCESSWIRE / March 20, 2017 / Active Wall St. blog coverage looks at the headline from KKR & Co. L.P. (NYSE: KKR) as the Company and Caisse de Depot et Placement du Quebec (CDPQ) announced collectively on March 17, 2017, the joint acquisition of USI Insurance Services (USI), a leading US insurance brokerage and consulting firm. Under an equal partnership, KKR and CDPQ will acquire USI from Onex Corporation and its affiliates at approximately $4.3 billion. Register with us now for your free membership and blog access at:

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One of KKR & Co.'s competitors within the Asset Management space, Athene Holding Ltd. (NYSE: ATH), released its financial results for Q4 and full year 2016 after the market close on Wednesday, March 15, 2017. AWS will be initiating a research report on Athene Holding in the coming days.

Today, AWS is promoting its blog coverage on KKR; touching on ATH. Get all of our free blog coverage and more by clicking on the link below:

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Breaking down the Agreement

KKR and CDPQ are set to acquire USI which operates through more than 4,400 professionals, out of 140 local offices throughout the US. USI has a diverse portfolio where it delivers property and casualty, employee benefits, retirement, and personal risk solutions. Headquartered at Valhalla, New York, USI reported net revenues of $1.0 billion for FY16. Leveraging the USI One Advantage, an interactive platform, the Company has established itself as the leading insurance brokerage and consulting firm.

Onex, Canada's largest buyout firm, agreed to buy USI from a fund run by Goldman Sachs Group Inc. (NYSE: GS) in 2012, in a transaction valued at $2.3 billion. USI has since made 30 acquisitions to increase its network across the US Onex and partners made an initial $610 million equity investment in the deal.

The Partnership

KKR and CDPQ will collectively fund this transaction through a private equity partnership which includes funds from KKR's balance sheet and CDPQ's capital pool. This partnership is designed to pursue attractive investment opportunities in high-quality businesses with a longer duration and relatively lower risk profile, at times, with lower returns, to build strong management teams and facilitate long-term strategic business building. KKR and CDPQ outbid others including buyout firms Carlyle Group L.P. and CVC Capital Partners to acquires USI.

Expansion Strategy

This new partnership of the KKR with CDPQ to make longer-hold, minimum leverage investments, reflects a wave of similar strategies by its competitors to seek benefits from holdings that generate stable cash flow with a steady growth rate. Blackstone (NYSE: BX) announced its first such deal on January 04, 2017, where it acquired the leading music rights organization SESAC, while Carlyle and CVC also plan to make core private equity investments.

According to Roland Lescure, CDPQ's Chief Investment Officer, insurance is a defensive sector and generates a lot of cash while it is relatively resilient to economic slowdowns and recessions. KKR views multiple growth synergies under this agreement and owing to its extensive expertise in the insurance and benefits brokerage industry, coupled with USI, it aims to generate compelling returns while growing the business in the long-term.

KKR's Growth Portfolio

This joint acquisition of USI comes on the heels of the news where KKR announced on March 06, 2017, the final closing of KKR Americas XII Fund, a $13.9 billion fund focused on opportunistic investments in private equity-related transactions primarily in the United States, Canada, and Mexico. KKR will initially invest approximately $1.4 billion in capital alongside investors through the Company's balance sheet and employee commitments.

On January 05, 2017, Cereve Inc., a privately-held health care Company viewing the launch of its FDA-cleared insomnia device, announced the closing of a $38 million Series B round of financing led by KKR. This investment by KKR was a step towards growth under its healthcare growth equity strategy where the Company aspires to be a unique partner in helping these firms reach scale and generate greater value to the shareholders.

The transaction is expected to close by the end of Q2 FY17 and is subject to customary closing conditions including regulatory approvals.

Stock Performance

On Friday, March 17, 2017, the stock closed the trading session at $18.16, slipping 1.04% from its previous closing price of $18.35. A total volume of 2.73 million shares have exchanged hands. KKR & Co.'s stock price surged 10.90% in the last three months, 25.73% in the past six months, and 26.13% in the previous twelve months. Furthermore, since the start of the year, shares of the Company have gained 19.05%. The stock is trading at a PE ratio of 33.08 and has a dividend yield of 3.52%.

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SOURCE: Active Wall Street