KKR and the Pitfalls of the Leveraged Buyout

The report argues that KKR's use of leveraged buyouts (LBOs) often leads to financial instability and labor abuses in its portfolio companies. It documents a pattern of health and safety violations, anti-union activities, and wage theft across various sectors, including healthcare and landscaping. The document also highlights KKR's role in high-profile bankruptcies, such as Toys "R" Us and Envision Healthcare, and alleges that the firm has engaged in antitrust violations by obscuring information from the US government during mergers and acquisitions.

• KKR's leveraged buyout model has historically led to company collapses and significant job losses while the firm continued to profit from fees. For example, the 1988 acquisition of RJR Nabisco resulted in a $730 million loss for the KKR fund and 6,000 eliminated jobs, while the 2005 investment in Toys "R" Us led to bankruptcy in 2017 with 33,000 employees losing their jobs, despite KKR and other investors collecting $464 million in fees and interest.
• OSHA has identified health and safety violations at multiple KKR portfolio companies, including Global Medical Response, Brightview, Channel Control Merchants, Charter Next Generation, Groundworks, and Refresco, resulting in penalties exceeding $525,000. Specific hazards include chemical exposure at Refresco and a trench wall cave-in at a Groundworks site in Missouri.
• KKR portfolio companies have engaged in anti-union activities and wage violations. Atlantic Aviation hired Morgan Lewis to run anti-union campaigns in 2024, and BrightView paid Stay Union Free Corp over $30,000 for an anti-union campaign in California. Additionally, American Medical Response settled for over $150,000 after underpaying nearly 800 EMTs in Seattle, and BrightSpring was ordered to pay over $110,000 in back wages in Kentucky and Kansas.
• The US Department of Justice sued KKR in January 2025, alleging the firm deliberately falsified documents and obscured information in at least 16 merger and acquisition deals to avoid antitrust scrutiny. KKR could face civil penalties up to $650 million under the Hart-Scott-Rodino Antitrust Improvements Act.
• Envision Healthcare, acquired by KKR in 2018 via a $9.9 billion LBO, was burdened with approximately $7 billion in debt, contributing to its May 2023 bankruptcy. The company also funded a dark money group, Doctor Patient Unity, spending at least $57 million on ads to oppose government rate setting for medical billing.
• While KKR promotes its employee ownership program as a way to give workers a voice, the report argues this does not replace the need for basic labor standards. KKR received an 'F' on the PESP 2023 Labor Scorecard due to issues across its largest portfolio companies.

APA

Private Equity Stakeholder Project (2025). KKR and the Pitfalls of the Leveraged Buyout. https://pestakeholder.org/wp-content/uploads/2025/11/PESP_Report_KKR-Pitfalls_2025-compressed.pdf

Chicago

Private Equity Stakeholder Project. KKR and the Pitfalls of the Leveraged Buyout. 2025. https://pestakeholder.org/wp-content/uploads/2025/11/PESP_Report_KKR-Pitfalls_2025-compressed.pdf.

Wikipedia

{{cite report |author=Private Equity Stakeholder Project |title=KKR and the Pitfalls of the Leveraged Buyout |date=November 2025 |url=https://pestakeholder.org/wp-content/uploads/2025/11/PESP_Report_KKR-Pitfalls_2025-compressed.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{privateequitystakeholderproject2025kkr, author = {{Private Equity Stakeholder Project}}, title = {{KKR and the Pitfalls of the Leveraged Buyout}}, institution = {Private Equity Stakeholder Project}, year = {2025}, month = nov, url = {https://pestakeholder.org/wp-content/uploads/2025/11/PESP_Report_KKR-Pitfalls_2025-compressed.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }