Jerome Kohlberg, Jr.
| Jerome Kohlberg, Jr | |
|---|---|
| Born |
July 10, 1925 New Rochelle, New York |
| Died | July 30, 2015 (aged 90) Martha's Vineyard, Massachusetts |
| Residence | Mount Kisco, New York |
| Nationality | United States |
| Alma mater |
Swarthmore College Harvard Business School Columbia Law School |
| Known for | Co-founder of Kohlberg Kravis Roberts |
| Net worth | $1.2 billion (March 2007) |
| Spouse(s) | Nancy Kohlberg |
| Children | 4 |
Jerome Kohlberg Jr. (July 10, 1925 – July 30, 2015) was an American businessman and early pioneer in the private equity and leveraged buyout industries founding private equity firm Kohlberg Kravis Roberts & Co. and later Kohlberg & Company.
He was listed on the 2008 Forbes List of billionaires as the 785th richest person in the world with an estimated net worth of $1.5 billion.
Kohlberg was raised in a Jewish family graduating from New Rochelle High School in New Rochelle, New York. Kohlberg served in the United States Navy during World War II and went on to college and graduate school on the GI Bill. He earned an undergraduate degree from Swarthmore College. He later received MBA degree from Harvard Business School and Bachelor of Laws in Columbia Law School. In 1986, he founded the Philip Evans Scholarship Foundation at Swarthmore.
Kohlberg joined Bear Stearns in 1955 where he would go on to manage the corporate finance department. Working for Bear Stearns in the late 1960s and early 1970s, Kohlberg, alongside Bear Stearns executives began advising a series of what they described as "bootstrap" investments. Their acquisition of Orkin Exterminating Company in 1964 is considered to have been among the first significant leveraged buyout transactions. In the following years the three Bear Stearns bankers would complete a series of buyouts including Stern Metals (1965), Incom (a division of Rockwood International, 1971), Cobblers Industries (1971), and Boren Clay (1973) as well as Thompson Wire, Eagle Motors and Barrows through their investment in Stern Metals. Although they had a number of highly successful investments, the $27 million investment in Cobblers ended in bankruptcy. Kravis and his associates created a series of limited partnerships to acquire these various corporations, ones they judged were performing well below their sales and profit potential or where there were untapped financial assets that could be monetized. In most cases, Kohlberg Kravis Roberts & Co put up ten percent of the acquisition price from its own funds and borrowed the rest from investors by issuing high-yield bonds.
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