KKR to Get Liquid On $HCA, Using Shareholder Money as a Means

KKR managed to convince management at HCA to buy back $800 million of stock from them, in one fell swoop, for the extreme discount of 1%.

08:35 | HCA | (80.93)
HCA to repurchase 9,360,958 shares of its common stock beneficially owned by affiliates of Kohlberg Kravis Roberts & Co. at $80.12/share

The Share Repurchase was made pursuant to the Company’s existing $3.0 billion repurchase program adopted by the Company’s board of directors in October 2015. After giving effect to the Share Repurchase, a total of $2.09 billion of share repurchases will have been effectuated under the program.

Michael Michelson, a general partner at KKR, in addition to being on the HCA board, without question, agrees with this move. Ever since Hercules was created, an entity that combined several PE firms, including KKR and Bain Capital, to acquire HCA and then bring them public again in 2011, they’ve been using shareholder money at HCA to liquidate their position.

Considering the fact that the stock has nearly tripled since then, thus far, the buybacks have been a great investment for the company. Then again, I’m not sure if share buybacks would’ve been the best use of capital over the given time frame, a period of great profit for hospital operators.

Nevertheless, the chrony capitalism continues at HCA, a denizen of Senator Bill Frist.