Private equity wants to do-it-themselves

Scott Jagow Dec 1, 2006

TEXT OF STORY

SCOTT JAGOW: Home Depot’s days as a publicly-traded company could be numbered.

Two private equity firms are reportedly mulling a bid of $100 billion for the do-it-yourself retailer.$100 billion would be, by far, the biggest leveraged buyout in history.

Now, Home Depot’s stock has fallen 15 percent in the last two years, but these buyout firms don’t really care, says Robert Kohl, a business editor at the Times of London.

ROBERT KOHL: As long as it’s in a steady state and going to produce decent profits — profits even that might be going downhill slowly — private equity won’t mind because the way that private equity owners make their money is by effectively swapping debt for equity.

The two firms circling Home Depot are Kohlberg Kravis Roberts and Texas Pacific Group.

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