KKR Drops $3B Bomb on Flexera -- Dividend, Debt, and a Power Play in Private Credit

KKR (NYSE:KKR) is stepping in with a heavyweight $3 billion private credit deal to help Thoma Bravo-owned Flexera Software clean up its capital stackand send some cash back to shareholders. The package includes a $2.03 billion term loan, a 590 million ($689 million) euro tranche, and a $150 million revolver. Sources say KKR's credit division is anchoring the deal, alongside Ares, Blackstone, Golub, HPS, and even Thoma Bravo's own credit arm. The loans are priced at 4.75 percentage points over respective benchmarksa premium in today's market, but possibly worth it for the flexibility on offer.

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The big draw? Leverage. Private credit shops are dangling higher debt limits to keep deals from drifting back to traditional banks, where rates might be better but strings are often tighter. In Flexera's case, the new capital refinances a $1.95 billion syndicated loan due in 2028and adds nearly $1 billion of incremental debt, according to Bloomberg. That gives Flexera room to maneuver, whether that means strategic M&A or simply writing a dividend check to its sponsor.

This isn't a one-off for Thoma Bravo. Back in April, it tapped direct lenders for $4 billion to back its Jeppesen buyout from Boeing. The firm seems to be leaning into the private credit playbook: speed, certainty, and structure over price. In a market where banks are fighting to claw back market share, this Flexera deal could be a signal that for some sponsors, the extra leverage and control are still worth the premium.

This article first appeared on GuruFocus.

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