KKR announced Tuesday it will purchase $820 million of newly issued convertible bonds from IT solutions firm Samsung SDS. This strategic investment sent the South Korean company's shares soaring as much as 20.8 percent.
Funds managed by KKR and Samsung SDS plan to collaborate on value-creation initiatives. KKR will advise Samsung SDS on mergers and acquisitions, capital allocation, and its growth as a full-stack AI solutions provider.
Analysts suggest the stock rally reflects anticipation of KKR's partnership, with the investment likely bolstering KKR's artificial intelligence portfolio. The deal is expected to support Samsung SDS's international expansion and M&A activities.
Samsung SDS plans to boost investments in AI infrastructure and its AI transformation business, leveraging KKR's funds and its own substantial cash reserves. The company aims to pursue new growth drivers, including global business expansion, new ventures like physical AI and stablecoins, and strategic acquisitions. KKR will act as a long-term advisor for six years.
The transaction, funded primarily by KKR's Asia Fund IV, is expected to close in the second quarter.