By Jason Kelly

March 11 (Bloomberg) — KKR & Co., the private-equity firm run by Henry Kravis and George Roberts that’s expanding its investments outside traditional buyouts, led a $235 million refinancing for Harden Healthcare LLC.

KKR’s asset-management unit bought about $140 million of Harden debt and its capital-markets group arranged a revolving credit line as well as the sale of senior secured notes, said Nathaniel Zilkha, co-head of special-situations investing at the firm. Austin, Texas-based Harden manages senior-care facilities, and provides hospice and home-health services.

KKR, created in 1976, is building businesses beyond traditional leveraged buyouts to boost revenue and profit. Last week, the New York-based firm named Zilkha, who previously worked in its private-equity group, and three other executives to positions in KKR Asset Management focused on distressed debt and leveraged finance.

“We’re able to address a whole universe of opportunities that used to go by the wayside,” Zilkha said in an interview. “One of the things that makes us an interesting partner is we can bring all of KKR’s resources to bear.”

The Harden deal resembles KKR’s investment in Eastman Kodak Co. last year. KKR agreed to buy as much as $400 million in new debt as a part of a refinancing deal.

Harden was started in 2001 and manages 34 facilities in Texas through its Trisun Healthcare subsidiary. In 2007, Harden bought Girling Health Care, which provides home-health services in nine states.

$800 Million

Scott Nuttall, who heads global capital for KKR, said on a Feb. 25 conference call the firm had raised $800 million from investors during the fourth quarter for credit strategies.

The asset-management unit oversees $13.4 billion and handles mezzanine and rescue financing, and distressed-debt and structured products such as collateralized loan obligations. Zilkha and Jamie Weinstein head global special situations, including distressed debt. Erik Falk and Chris Sheldon run leveraged-credit strategy within the asset-management unit.

To contact the reporter on this story: Jason Kelly in New York at jkelly14@bloomberg.net

Last Updated: March 11, 2010 15:45 EST

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