Investment Group to Buy Jim Walter for $2.4 Billion

NEW YORK —  Jim Walter Corp., one of the nation’s largest home builders, will be taken private in a sweetened $2.43-billion leveraged buyout led by the New York investment firm Kohlberg Kravis Roberts & Co., the company said Thursday.

The $60-a-share bid topped KKR’s earlier proposal of $50 a share, worth about $2.03 billion, made in mid-July.

At that time, industry analysts speculated that the initial offer was too low, and Wall Street responded by pushing the stock of Tampa, Fla.-based Jim Walter sharply higher in anticipation of a higher bid.

Jim Walter shares, which traded at $45.50 before the initial offer was disclosed July 16, closed up $1.375 to $59.875 in active trading Thursday on the New York Stock Exchange.

Under the buyout, an investment group led by Kohlberg Kravis will begin a cash tender offer next Wednesday for all of Jim Walter’s 40.6 million common shares outstanding. The offer was conditioned upon a majority of the shares being tendered.

Under the agreement, Jim Walter shareholders will receive their next regular quarterly dividend of 30 cents a share.

Jim Walter is a diversified building materials and natural resources company that operates primarily in the South and Southwest. It also is one of the country’s largest home builders, specializing in inexpensive, partially finished “shell” houses.

Kohlberg Kravis said it had commitments from two major banks and a syndicate of banks to provide $2 billion of the necessary financing. The firm and its affiliates would come up with the rest, Kohlberg Kravis said.

George Roberts, a general partner of Kohlberg Kravis, called Jim Walter “a strong company with excellent management and a fine record. We look forward to working with Jim Walter and his management team and making the company an even stronger enterprise,” Roberts said.

Jim Walter had net income of $46.7 million, or $1.15 per share, in its third quarter ended May 31, up from $38.5 million, or $1.01 a share, a year earlier. Revenue dipped to $610.5 million from $626.9 million.