Leveraged Buy-Out Collapse Continues
Sep 27, 2007

(LPAC)--Kohlberg Kravis Roberts & Co. (KKR) and Goldman Sachs Group announced today that they have abandoned their $8 billion takeover of Harman International Industries, the audio equipment manufacturer. This is the first open collapse of a major leveraged buyout (LBO), with literally dozens of other multibillion-dollar deals ready to blow.

KKR and Goldman claim that they are responding to a decline in the target company's performance, a feeble attempt to cover for the fact that the entire global credit market for such scams has dried up. Harman is owned by the husband of Rep. Jane Harman, the California Democrat.

KKR and Goldman will have to pay a $225 million termination fee for backing out of the deal - a pittance compared to the billions being lost on the LBO circuit these days.


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